Trump’s ‘Crypto Czar’ May Mean Less Regulation and More Innovation 

In a recent social post, newly-elected Donald Trump identified two areas he says are “critical to the future of American competitiveness”: Artificial Intelligence (AI) and Cryptocurrency.  Whether he knew it or not, he echoed assertions made by his predecessor and former rival.

In September, the Biden Administration announced it was committed to developing AI infrastructure in the U.S. because it is “vital for protecting national security …” Two years earlier President Biden signed an Executive Order outlining the “first whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.”

Biden has a track record of supporting new tech, but given Trump’s past leanings, his new support for cryptocurrency is a head-scratcher.

In 2021, Trump called Bitcoin “a scam.” Steve Mnuchin, Trump’s then-Treasury Secretary, went so far as to compare cryptocurrencies to “old Swiss secret bank accounts,” labeling them a “national security issue” tied to “billions of dollars of illicit activity such as cybercrime, tax evasion, illicit drugs and human trafficking.”

Regardless, Trump’s newfound enthusiasm was evident when he announced that David Sacks, a Silicon Valley superstar, would serve as the “artificial intelligence (AI) and crypto czar” in his new administration.

Why the about-face? Some credit tech billionaire and Trump advisor Elon Musk with helping ease the new President’s mind with regards to cryptocurrencies. It’s also possible that the millions of dollars Silicon Valley contributed to Trump’s reelection bid helped broaden his views.

Musk may have also played a part in getting Sacks his new tech “czar” role. Once both Musk and Sacks occupied the C-Suite at PayPal. Since then Sacks has maintained connections to Tesla, Musk’s automotive brand.

Whatever the reason, Trump’s decision to put Sacks in charge of AI and crypto is seen by many as a sign that Trump may now be a born-again tech proponent.

“Donald Trump is going all in on Silicon Valley,” says Politico following the Sacks announcement. The New York Times opines that the appointment “further cements the expectation that the Trump White House intends to take a lighter hand with the regulation of technology and in particular cryptocurrencies …”

Close observers of the tech community agree.

“Given Sack’s resume, it’s a pretty safe bet that the second Trump term will be far more crypto-friendly than his first,” says Susan Lindeque, CEO of Avestix Group, an investment firm that invests in alternative investments such as crypto as well as tech startups. “Not only that, but we’ll likely see a steep reduction in technology regulations and far more innovation. This in turn could jolt venture capital investing.”

PitchBook agrees, writing “Sacks’ new role would grant him wide leverage to direct the executive branch’s approach to crypto and AI regulation — areas that could carry sweeping consequences for the startup world, including companies in [Sacks-owned] Craft Ventures’ portfolio.”

In case there is any doubt about Trump’s plans to reduce red tape, Trump made his intentions clear, saying Sacks “will work on a legal framework so the Crypto industry has the clarity it has been asking for and can thrive in the U.S.”

Sacks carries enough new technology know-how to help foster real change.

“Craft Ventures has a long history of supporting innovative, successful crypto projects, such as BitGo, a digital asset platform and SetLabs, a decentralized financial — or DeFi — platform,” she says. “He’s been highly supportive of AI projects, having championed Replit, an AI web development tool, and Pearl, which uses AI in dentistry.”

Lindeque believes Sacks’ influence won’t be limited to supporting advancements in AI and crypto. She says he could also propel progress in robotics, fintech, quantum computers, the Internet of Things (IoT), and blockchain because progress in one of those areas can cross-pollinate and drive exponential growth in the others.

“One of the biggest obstacles preventing technological innovation across the board has been a lack of regulatory clarification,” Lindeque says. “By naming David Sacks as AI and crypto czar, the White House is taking a step towards strengthening relations between the Beltway and Silicon Valley, something that can help expedite all U.S. innovation.”

Written by Susan Lindeque.
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