Trump’s Day Two: No BTC reserve, knowledge of memecoin moolah

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Two days into his presidency, Donald Trump still hasn’t issued any crypto-specific executive orders, but hey, even Jesus waited three days before his big reveal.

• BTC reserve delay starts to grate
• Brian Armstrong’s D.C. crypto wish list
• Bank of America pumped for stablecoin payments
• Coinbase shivs Tether
• Trump memecoin controversy not going away
• Democrats could stall digital asset legislation
• SEC launches’ crypto task force’
• Binance’s Tigran Gambaryan plots his comeback

Where’s the reserve, Donald?

Day One of Trump’s second stint as U.S. President may not have ticked any of the boxes on the crypto community’s wish list of pro-crypto executive orders, but crypto CEOs are keeping the faith (in public, at least). Trump is scheduled to address this year’s World Economic Forum (WEF) gathering by video on Thursday (January 23), but many crypto execs are already in Davos cashing in on his (alleged) crypto devotion.

On January 21, the WEF hosted a crypto-focused panel that discussed Trump’s campaign pledge to establish a ‘strategic [BTC] stockpile,’ or, as the crypto kids call it, a ‘strategic reserve.’ The said stockpile/reserve would include all the BTC seized by American law enforcement as the proceeds of crime, plus—as crypto bros so desperately hope—all the BTC the U.S. government can afford to buy, thereby pumping the bags of existing HODLers.

Among the most enthusiastic proponents of this reserve is Coinbase (NASDAQ: COIN) CEO Brian Armstrong, a first-time WEF attendee. Calling BTC “digital gold” that “will equal or even surpass gold,” Armstrong claimed BTC’s notorious fiat price volatility was becoming a thing of the past. And, in case anyone missed his main point, Armstrong claimed that a U.S. reserve “could be a huge driver of [BTC] price appreciation.”

Denelle Dixon, CEO of the Stellar Development Foundation (XLM payment network), claimed crypto is “misunderstood” because “there’s not a lot of focus on the actual utility.” (Possibly because the panelist sitting next to her keeps calling it ‘digital gold,’ but whatever.)

A dissenting voice came from Lesetja Kganyago, governor of the South African Reserve Bank (SARB), who appeared to understand all too well why the crypto casino operators want central bankers like himself to throw their country’s cash on the table and let ‘er ride.

Kganyago said he’d have “a significant problem with a lobby that says governments should hold this asset or hold that asset. There is a history to gold. There was once a gold standard … If we now say okay, [BTC]. What about platinum? What about coal? Why don’t we hold strategic beef reserves, or mutton reserves, or apple reserves? Why [BTC]?”

Kganyago took issue with the crypto sector’s nine-figure campaign contributions during the recent U.S. election and the sector’s pledge to keep the cash flowing to favored candidates in the 2026 mid-terms. This was the definition of “regulatory capture,” and “if regulation is going to be established through the power of money, then we have a problem.”

Kganyago warned that if any industry is allowed to buy regulations that essentially let that industry run wild, “then we seem to have forgotten how far we got with the great financial crisis” of 2008 that is credited with spurring the launch of Bitcoin the following year.

Taking up this point was Jennifer Johnson, president/CEO of asset managers Franklin Templeton, who reminded the panel that “much of the [financial] regulation we have today was created after the Great Depression, with the goal of protecting consumers.” Johnson said regulations need updating as technology progresses but cautioned that “we need to remember what the rules were created for.”

Kganyago also warned that if money could buy favorable crypto regulations, it could also buy regulations that ban it. “It will happen that another group that wants to end cryptocurrencies will do the same. And I don’t think that’s how regulations should evolve.”

Kganyago acknowledged that regulators are often slow to react to new technologies and that nobody benefits from unclear regulations. He suggested the U.S. join with the rest of the world in establishing mutually acceptable crypto rules, but noted that “it has already happened many times that the US has chosen not to participate in what is said at a global level.”

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Armstrong’s D.C. crypto wish list

Speaking to CNBC at Davos, Armstrong dismissed concerns over Trump failing to immediately issue a stockpile/reserve order, saying “it’s been one day. I’m not too worried.” After all, Trump waited until Day Two to honor his campaign pledge to free Ross Ulbricht, founder of the defunct Silk Road dark web marketplace, who received a “FULL AND UNCONDITIONAL PARDON” on January 21.

Armstrong pivoted to his view that the crypto sector was “ready for clear rules. That’s our big push next, trying to go get some legislation passed in the U.S. to make it even more clear.” Armstrong claimed that the Biden administration “tried to weaponize the lack of clarity in the rules to really push back, even on the good actors … like us.”

Armstrong said he looked forward to the Trump administration “rearticulating … that people have the right to self-custodial wallets, the right to own [BTC] without being persecuted or being debanked—that was a big issue in the past four years as well, Operation Choke Point 2.0.”

That ‘operation’ refers to allegations that the Federal Deposit Insurance Corporation (FDIC) pressured banks to ‘debank’ crypto customers. But Freedom of Information Act (FOIA) requests have produced documents showing only that the FDIC requested more information from banks looking to offer crypto products directly to consumers and asked them to pause these plans until the FDIC—the financial backstop of banks that FAFO—could vet the products.

Asked by CNBC if Armstrong truly believed in this theory, Armstrong claimed that “regulators, likely cajoled by people like [anti-crypto Sen.] Elizabeth Warren, started to apply a soft pressure to the banks … and if you’re a bank CEO, that’s a really hard thing to do, if your regulator comes in and says ‘hey, we’re uncomfortable with this’… that kind of soft pressure—which was really unlawful, in my view—was what was happening.”

Trump recently promoted FDIC vice-chair Travis Hill to acting chair until a permanent chair can be confirmed by the Senate. Hill has promised sweeping changes at the FDIC in relation to crypto, including “putting an end to any and all Choke Point-like tactics.”

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Bank of America talking payments and patents

Franklin Templeton CEO Johnson later told Bloomberg that “the thing with the Trump administration is we’re going to start to see them converge more—the tradfi and the crypto—which is something that we need.”

As if on cue, Bank of America (BoA) CEO Brian Moynihan told CNBC that his company would embrace digital asset-based payments if Congress and federal banking regulators gave them the green light. “If the rules come in and make it a real thing that you can actually do business with, you’ll find that the banking system will come in hard on the transactional side of it.”

Moynihan noted that 99% of his company’s $3 trillion in daily transfers was already done digitally. Given the plethora of digital payment options currently available at most retailers, Moynihan said paying with digital assets “would just be another form of payment.”

BoA is no blockchain neophyte, with Moynihan noting the company’s ownership of “hundreds of patents” related to the technology. But BoA has so far declined to implement blockchain tech into its operations largely due to “regulatory confusion” in the U.S. 

Moynihan expressed interest in some form of dollar-denominated stablecoin-based payments, provided “we know where those [reserve] assets are,” that regulators approve banks custodying digital assets, and are “okayed in terms of attribution of who’s moving the money, because of [Bank Secrecy Act/anti-money laundering] rules, then we can engage in it heavily.”

Moynihan appeared to pour cold water on those crypto operators who insist that anonymity is paramount or who just don’t give a damn about know-your-customer rules. “We can’t do [digital payments] through people who can’t have the attribution to the customer level we have to have. We have to know our customer’s customer and that’s a difficult thing.”

That reference could be a shot at Tether, issuer of the largest stablecoin by market cap (USDT). USDT has been described by the United Nations as the preferred token of criminals, a claim borne out by law enforcement actions around the globe.

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Coinbase shivs Tether

Speaking of Tether, Coinbase’s Armstrong did an interview with the Wall Street Journal (WSJ) on Tuesday in which he suggested his exchange might be compelled to delist USDT if Tether couldn’t comply with upcoming U.S. stablecoin legislation. Armstrong said the new legislation will likely include requirements to keep 100% of reserve assets in T-bills and subject those reserves to regular third-party audits.

Coinbase already delisted USDT for its European customers, in keeping with the stablecoin provisions of the European Union’s Market in Crypto-Assets (MiCA) regulatory framework. (The European Securities and Markets Authority issued a statement on January 17 indicating that all MiCA-approved operators should ensure stablecoin compliance “as soon as possible and no later than the end of Q1 2025.”)

Armstrong told the WSJ that Coinbase wants to give USDT users “an off-ramp” to help them “transition to a system that we think is more secure.” Recall that Coinbase is a partner in USDC, the Circle-issued stable that is Tether’s largest rival, so this seems less a case of Brian suddenly adopting a newfound respect for the rule of law than his sensing the opportunity to shiv a competitor and look like a very good boy while doing it.

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Trump claims ignorance of memecoin windfall

Armstrong was far less upfront when it came to the subject of Trump issuing a utility-free memecoin ($TRUMP) and his wife doing likewise ($MELANIA), not to mention the Trump family’s decentralized finance (DeFi) product World Liberty Financial (WLF). All of these efforts have been raking in big bucks from MAGA types, crypto speculators, and those looking to curry favor with the guy swilling Diet Cokes in the Oval Office.

Pressed by CNBC host Andrew Ross Sorkin for a response, Armstrong claimed I don’t have too much of an opinion on that.” He clarified that “I think anybody should be able to create a collectible or a piece of artwork … at Coinbase, we really don’t try to take a position or recommend any one asset or another, we just really try to look at what are our minimum listing standards from a compliance or legal point of view and then we let the market decide.”

(This will come as news to any fans of BSV, the token that Coinbase steadfastly refused to list, even when the token was in the top five of all digital assets by market cap. In the case of BSV, ‘the market’ didn’t get to decide, but Coinbase’s ‘invisible hand’ sure did.)

Trump was asked about his memecoin during a news conference on Tuesday, specifically about whether he planned to “continue to sell products that benefit yourself personally while you’re president.” Trump claimed not to know whether he’d benefited from $TRUMP, saying, “I don’t know much about it other than I launched it. I heard it was very successful.” Told that he’d made several billion dollars, Trump made a joke about the group of tech CEOs he’d just met with, saying “that’s peanuts for these guys.”

Trump may find it funny, but there’s no shortage of blockchain-based evidence that insiders had advance notice of the release of the $TRUMP/$MELANIA tokens and used it to make millions. Crypto bro Ran Neuner publicly admitted that he “obviously profited” from his advanced knowledge of the $MELANIA release.

There were two disturbing data points that surfaced following the $TRUMP token’s release. The first showed Google searches for ‘how to buy crypto’ skyrocketing as word of the token spread. The second came via a survey showing 42% of $TRUMP/$MELANIA buyers were first-time crypto investors, meaning they likely have no concept of tokenomics or that the tokens appear custom designed to fleece these noobs for cash.

On a more positive note, 55% of those surveyed think the Trumps are “leveraging their influence to manipulate the crypto market” and three-quarters felt the memecoins are “harmful” to the overall digital asset market.

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Memecoins could delay crypto market framework legislation

Those views are shared by Rep. Maxine Waters (D-CA), whose support could be key in passing digital asset legislation in Congress this year. On January 20, Waters issued a statement saying $TRUMP “represents the worst of crypto and shows why many regulators, advocates, and policymakers have long been worried.”

Waters warned that $TRUMP buyers “may be overpaying for something of dubious value, and will be left holding the bag when Trump’s insiders sell.” Trump has “created a way to circumvent national security and anti-corruption laws, allowing interested parties to anonymously transfer money to him and his inner circle.” Waters believes Trump’s token will “further taint the crypto industry, which has long fought for legitimacy and a level playing field with other financial institutions.”

TD Cowen analyst Jaret Seiberg said $TRUMP “puts at risk the ability to advance [crypto legislation] with the bipartisan support it will need to become law.” Democrats “will be searching for indications that foreign governments, foreign businesses and domestic companies are using the coin to influence Trump’s decision-making. They also will demand details on how the Trump family is monetizing this investment.” Trump will likely tell the Dems to pound sand, but this could encourage Dems to dig in their heels.

At any rate, Seiberg suggested a market framework bill might not come around until 2026, and the reason is hilarious. With crypto bigwigs like Armstrong already on record pledging to spend another nine-figure sum on the midterm elections, Seiberg suggested that politicians could delay any bill vote to ensure they collect the maximum amount possible. Careful what you wish for, Fairshake.

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SEC crypto avengers, assemble!

Just one day after being appointed the acting chair of the Securities and Exchange Commission (SEC), commissioner Mark Uyeda announced the formation of a new “crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets.”

Commissioner Hester Peirce will lead the task force, with Uyeda’s senior advisors, Richard Gabbert and Taylor Asher, serving as chief of staff and chief policy advisor, respectively. The task force will help the SEC “draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously” vis-à-vis digital assets.

The task force is apparently required due to the SEC previously having “relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way … The result has been confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud.”

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Executive shuffling

Finally, Elon Musk’s Department of Government Efficiency (D.O.G.E.) has a new website and one less co-leader. Well, ‘website’ might be a stretch, as it so far consists of a single page showing a Shiba Inu dog like the one that inspired Musk’s favorite crypto token.

On January 20, Trump issued an executive order establishing D.O.G.E. with a mission “to implement the President’s DOGE Agenda, by modernizing Federal technology and software to maximize governmental efficiency and productivity.”

D.O.G.E.’s commitment to efficiency was widely mocked when it was first announced, as Musk was sharing leadership with MAGA figure Vivek Ramaswamy. But the latter was forced out over the weekend, leaving Musk solely in charge.

Trump also named Danielle Sassoon his acting U.S. Attorney for the Southern District of New York (SDNY). Sassoon, an eight-year veteran of the SDNY, will hold the fort until former SEC chair Jay Clayton can secure Senate confirmation for this crucial role in policing America’s financial capital.

Sassoon’s most high-profile role of late was as one of the SDNY team that prosecuted Sam Bankman-Fried (SBF), fraudulent founder of the defunct FTX exchange. SBF was handed a 25-year prison sentence last March for his fiscal shenanigans that led to FTX’s collapse in November 2022.

And last but not least, Tigran Gambaryan, the Binance exec who spent eight months in a Nigerian prison before being released last October, is reportedly open to rejoining the U.S. government in whatever capacity it sees fit. Gambaryan, who became the scapegoat for Binance’s alleged financial shenanigans in Nigeria, previously worked in Washington, DC as an agent at the IRS Criminal Investigation (IRS-CI) unit tracking illicit crypto payments.

CoinDesk reported that Gambaryan had been recommended for regulatory roles including the Federal Bureau of Investigation’s (FBI) cyber unit or head of crypto assets at the SEC. Referencing his IRS-CI work during Trump’s first term—which included corruption investigations related to Silk Road—Gambaryan said “it would be an honor to serve my country again and work alongside the incredible men and women in law enforcement.”

We’ll know for sure if Gambaryan is headed back to D.C. if he first releases a memecoin. You’re nobody in Washington these days without one.

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