On February 4, 2025, AI and Crypto Czar David Sacks held his first press conference, offering long-awaited insight into his regulatory approach. Since his appointment by President Donald Trump, the crypto industry has speculated on how Sacks—a known supporter of DePIN projects like Helium and Hivemapper—would shape policy. His remarks made clear that his administration will prioritize regulatory clarity and foster innovation.
The Securities and Exchange Commission (SEC) aggressively pursued digital asset cases under the Biden administration, conducting over 95 enforcement actions according to Merkle Science’s own research. While some targeted outright fraud, many relied on the broad interpretation of the Howey Test, leading to what Merkle Science’s Director of Law Enforcement Affairs Robert Whitaker called "regulation by enforcement."
Sacks criticized this approach, stating, "We're coming off, frankly, four years of arbitrary prosecution of crypto companies where the SEC wouldn't tell founders what the rules were, but then they would prosecute them." He further noted that some entrepreneurs were even personally debanked for founding crypto companies.
To address this, Sacks pledged to establish clear, federal-level regulations, including long-overdue guidance on stablecoins. "[Entrepreneurs] just want to know what the rules of the road are so they can abide by them," he said.
Establishing clear jurisdictional boundaries between government agencies is crucial for regulatory clarity in cryptocurrency. During the Biden era, agencies often had overlapping and sometimes conflicting mandates, relying on outdated policies like the Securities Act of 1933. This lack of coordination created uncertainty for businesses and stifled innovation.
A key takeaway from the press conference was the Trump administration’s commitment to fostering greater collaboration around cryptocurrency—across party lines, between both houses of Congress, and among regulatory agencies. To drive progress on regulatory clarity and stablecoin legislation, a bicameral working group will be formed, bringing together the House Financial Services Committee, the Senate Banking Committee, the House Agriculture Committee, and the Senate Agriculture Committee.
“With the wind at our back of a leader like President Trump who knows that financial innovation, financial technology is where America's heart is, where our entrepreneurs' hearts are, that will lead from the executive branch…I look very, very forward to the success we're going to have in the 119th Congress,” said Senator Chairman Hill, one of several leaders who joined Sacks at the press conference.
Sacks and his colleagues made it clear that crypto policy is not just about regulation—it’s about securing the U.S.’s position as a leader in financial innovation. Under Biden, stringent SEC actions drove many crypto companies offshore to jurisdictions with clearer frameworks, such as the EU’s Markets in Crypto-Assets (MiCA), Singapore’s Payment Services Act, and the UAE’s Virtual Assets Regulatory Authority.
"Financial assets are destined to become digital, just like every analog industry has become digital. And we want that value creation to happen in the United States rather than giving it away to other countries," Sacks stated. He argued that attracting crypto businesses would also strengthen consumer protections, citing the offshore collapse of FTX as a cautionary tale.
Beyond fostering innovation, the administration sees stablecoins as critical to maintaining the U.S. dollar’s global dominance. "The stablecoin really has the potential to ensure American dollar dominance internationally, to increase the usage of the US dollar digitally as the world's reserve currency, and in the process, create potentially trillions of dollars of demand for US Treasuries," Sacks said.
Under Biden, crypto was often singled out as a risk vector for money laundering and terrorism financing, a focus evident in enforcement actions like the SEC’s case against Silvergate Capital Corporation, which cited "misleading investors about the strength of the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program."
However, the Trump administration is signaling a shift in focus. When asked about AML policies, Chairman Scott noted, "The Bank Secrecy Act is something we've discussed...The broader conversation should not be about digital assets alone but about bad actors doing bad things by any means necessary." (Click here to learn more about the Bank Secrecy Act (BSA)).
Despite this pivot, compliance remains non-negotiable for crypto businesses. To navigate evolving regulations, companies must fortify their KYC, AML, and CFT protocols across all payment channels. Blockchain analytics is an essential component of this strategy—screening customers for sanctions exposure, monitoring transactions for suspicious activity, and tracing illicit on-chain movements are critical safeguards.
Sacks’ first digital asset press conference signaled a new era of regulatory clarity and competition in the U.S. crypto landscape. But with major policy shifts on the horizon, businesses must remain proactive. Merkle Science’s Compass enhances compliance programs by automating risk assessments and strengthening KYC/AML frameworks, while Tracker empowers investigators to trace illicit funds and support law enforcement efforts. Contact us for a free demo for Compass or Tracker.
