When crypto reaches the polls, investors will support the results of the US election

Crypto venture capitalists are seeing a “change in the political tenor” in the United States but still expect the outcome of the November election to have major implications for the industry.

The improved atmosphere around crypto companies was evident in May when Ethereum exchange-traded funds (ETFs) were rapidly approved. At the time, the market's confidence in the green light from regulators rose from 6% to 100% effectiveness in two weeks.

Another big step came from Congress. Also in May, the House of Representatives passed the 21st Century Act (FIT21) with bipartisan support. The bill seeks to clarify the role of government agencies in regulating digital assets, a long-overdue demand from crypto companies.

Following a prolonged crackdown on companies and their founders, there are signs of a more level playing field for digital assets. However, the industry may need more time. Cosmo Jiang, managing partner at Pantera Capital, has witnessed many blockchain-based businesses moving abroad in recent years.

“Actually, many entrepreneurs in the network have approached us asking whether they can go overseas. It's a shame that we lose talented entrepreneurs and their valuable ideas,” Jiang told Cointelegraph.

One of the companies recently targeted by the country's unclear regulatory landscape is Consensus, the parent company of self-protecting wallet MetaMask. In a complaint filed on June 28, the Securities and Exchange Commission (SEC) argued that Consensus “does not have” the agency's authority to regulate the software since the company has been operating as an unregistered broker and has been selling unregistered securities since 2020. Interfaces like MetaMask.

“Lack of control transparency and disagreement between different government bodies […] Carlos Pereira, partner at BITKRAFT Ventures, will make a big difference in the market. The executive sees positive developments for the industry but warns that obstacles remain.

Although at the moment crypto is being talked about more positively in both campaigns, one side felt more “reaction” in their shift, after it became more popular (especially among donors) and it is only turning positive until now. Their support. Therefore, we think that different poll results may have different results.

Related: FIT21 Bills Crypto ‘Watershed Moment' Despite CFTC-SEC Conflict

There are no contingency plans

Although the impact of the president's election on the industry is uncertain, venture capital firms are not operating with contingency plans. Instead, investors are looking at new business trends and the convergence of technologies such as artificial intelligence and blockchain.

“There are no contingency plans, but we certainly recognize the potential for volatility and changing policy outcomes,” said Pereira, adding that the election outcome could affect the scale and pace of changes to digital assets in the United States, such as the potential passage and implementation of the FIT21 bill.

The regulatory environment for tokens could see change under FIT21, meaning that how tokens are regulated will affect the definition of what kind of security is associated with commodities. Specifically, the bill provides that digital assets may fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC). Otherwise, they may be considered securities under SEC regulation.

If passed, the bill would allow more blockchain-based businesses to organize using tokens instead of equity, according to Pantera's Jiang:

“The FIT21 bill will undoubtedly undergo many changes before the final version is launched, but it is the first step towards creating a regulatory framework where tokens with real business models can properly register with regulators.”

The Senate could take several months to review the FIT21 bill. SEC Chairman Gary Gensler previously criticized the bill, saying it would introduce 22 “new regulatory loopholes” and pose a risk to the stability of capital markets.

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