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Trump’s crypto-friendly policies could increase crypto crimes, several news reports and analysts have raised concerns. 
According to a Guardian report, there are reasons to believe that there can be potential misuse of cryptocurrency by far-right extremists and terrorist groups. 
<h3 id="trump-s-crypto-policy-revamp-has-critics">Trump’s crypto policy revamp has critics</h3> 
Recent reports cites experts who warn that loosening crypto regulations without proper oversight could facilitate crypto misuse. Especially when the Biden administration’s treatment was rather cautious. 
However, would <a href="https://www.cryptopolitan.com/trump-is-considering-paul-atkins-to-run-sec/">Trump’s</a> approach mean an increase in crypto-related crimes? Let’s put the regulatory framework and its ever-changing dynamics into context before arriving at any conclusion.&nbsp; An alteration in the cryptocurrency regulation was a major part of Trump’s campaign. President-elect Trump has named several pro-crypto individuals who will be appointed by the administration. 
Additionally, crypto-skeptic SEC Chair Gary Gensler’s resignation has further reinstated the possibility of pro-crypto policies with both securities and commodities regulators expecting clearer power to supervise the sector. Here are three reasons why this route might prove beneficial contrary to popular opinion. 
<h3 id="span-data-preserver-spaces-true-stronger-regulation-could-reduce-illicit-span-span-data-preserver-spaces-true-activity-span">Stronger regulation could reduce illicit activity</h3> 
It is too soon to say that Trump’s agenda would not strengthen crypto frameworks. While he is expected to make the policies advantageous to the sector, weak industry supervision may not be a by-product. Some analysts say that Trump’s crypto-friendly policies might lead to a convenient business environment that would inevitably promote leniency in the sector. 
However, an independent look at the term ‘crypto-friendly policies’ may suggest a framework of integration with the industry and effective regulation. This integration can also lead to a decline in criminal behavior. Research has time and again confirmed that potent regulatory legislation has a direct correlation with reduced illicit activities in any sector. 
A study by <a class="editor-rtfLink" href="https://www.trmlabs.com/post/trm-labs-finds-link-between-stronger-regulation-and-reduced-illicit-activity-in-new-report?utm_source=chatgpt.com" target="_blank" rel="noopener nofollow">TRM Labs</a> suggests that jurisdictions with strong crypto regulations have shown a significant decrease in illegal transactions. The report states, “Virtual asset service providers (VASPs) in countries with full licensing and supervision regimes have lower rates of illicit activity than those in less regulated jurisdictions.” Therefore, it seems like regulatory strength can help the US government in promoting development without compromising security. 
<h3 id="span-data-preserver-spaces-true-why-pro-crypto-policies-cannot-be-called-a-crime-magnet-span">Why pro-crypto policies cannot be called a crime magnet</h3> 
The assumption that pro-crypto policies lead to an increase in crime stands disputed by the historical data. <a class="editor-rtfLink" href="https://www.imf.org/en/Publications/WP/Issues/2022/03/25/Crypto-Corruption-and-Capital-Controls-Cross-Country-Correlations-515676?utm_source=chatgpt.com" target="_blank" rel="noopener nofollow">According</a> to an International Monetary Fund (IMF) paper, there is a correlation between higher crypto adoption and higher perceived corruption. The paper discusses how stricter capital controls are associated with higher crypto usage, as individuals might use crypto to bypass these controls.&nbsp; 
What is noteworthy is that the paper supports the need for regulations to remove these risks. The inference we can draw is crypto misuse is more tied to existing governance and financial system weaknesses than to regulatory leniency alone. The data, thus, challenges the assumption that Trump’s approach might lead to a misuse of digital assets. 
<figure id="attachment_619458" aria-describedby="caption-attachment-619458" style="width: 100%" class="wp-caption alignnone">
 <img loading="lazy" decoding="async" class="size-full wp-image-619458" src="https://www.cryptopolitan.com/wp-content/uploads/2024/11/Screenshot-2024-11-28-093944.png" alt="Inferring Trump policy impact " width="667" height="285" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/11/Screenshot-2024-11-28-093944.png 667w, https://www.cryptopolitan.com/wp-content/uploads/2024/11/Screenshot-2024-11-28-093944-300x128.png 300w" sizes="(max-width: 667px) 100vw, 667px">
 <figcaption id="caption-attachment-619458" class="wp-caption-text">
 Source: IMF Paper (2022)
 </figcaption>
</figure> 
On the other hand, it promotes the possibility of an ecosystem that’s secure and capable of addressing the ever-changing dynamics of the crypto industry. However, a strong hold on the regulatory framework would be a non-negotiable for this possibility to turn into a reality. An issuance of proper guidelines can help in mitigating the risks of the crypto sector. 
<h3 id="span-data-preserver-spaces-true-regulations-can-strengthen-the-crypto-span-span-data-preserver-spaces-true-market-span">Regulations can strengthen the crypto market</h3> 
Over the years, executives and businesses in the crypto space have advocated for clarity in the regulations to promote transparency and consumer protection. The <a class="editor-rtfLink" href="https://www.thetimes.com/business-money/economics/article/regulation-is-just-what-the-crypto-sector-needs-and-wants-58rtbvjbq?utm_source=chatgpt.com&amp;region=global" target="_blank" rel="noopener nofollow">government</a> also has a variety of tools at its disposal to trace and eliminate illegal activities. With advanced blockchain analytics and monitoring tools, the security and growth of the cryptocurrency sector can go hand-in-hand. 
Policy changes that give equal importance to innovation and compliance can nurture the crypto industry while being vigilant for security. By definition, progressive policies do not deter consumer security. 
A shift in focus from outright rejection of the pro-crypto approach to building an effective regulatory framework seems to be the catch. Trump’s approach acknowledges the cryptocurrency sector as a vital part of the global financial ecosystem. But, the work doesn’t end there. Trump’s emphasis on clarity of regulations and collaboration with industry experts might pave the way to future-proof legislation in the dynamic cryptocurrency sector. However, the real game-changer would be the implementation of the policies. 
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3 obvious reasons why Trump’s crypto-friendly policies do not mean more crypto crimes

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