President-elect Donald Trump has nominated Scott Bessent, a prominent hedge fund manager known for his pro-cryptocurrency stance, to serve as the next Secretary of the Treasury, multiple news outlets reported late Friday.

Bessent, founder of Key Square Group, has been a significant economic adviser to Trump’s campaign and is expected to play a pivotal role in shaping the administration’s economic policies. Among other things, he’s an ardent supporter of Trump’s plan to create a strategic Bitcoin Reserve.

Born in 1962 in Conway, South Carolina, Scott Bessent graduated from Yale University in 1984. He began his career in finance at Brown Brothers Harriman and later joined Kynikos Associates. In 1991, Bessent became a partner at Soros Fund Management, where he played a key role in the firm’s notable wager against the British pound.

After leaving Soros Fund Management in 2000, Bessent founded a $1 billion hedge fund, which he managed until 2005. He also served as a senior investment advisor at Protégé Partners. In 2011, Bessent returned to Soros Fund Management as Chief Investment Officer, a position he held until 2015. That year, he established Key Square Group, a global macro investment firm.

Pro-Cryptocurrency Advocacy

Bessent has been an outspoken advocate for cryptocurrencies, viewing them as integral to the future of finance. He has expressed optimism about the role of digital assets in promoting financial freedom and innovation. His pro-crypto stance aligns with the administration’s interest in integrating digital currencies into the broader economic framework.

He’s supported both Democratic and Republican candidates. In 2000, he hosted a fundraiser for Vice President Al Gore’s presidential campaign. More recently, he has been a significant donor and adviser to President-elect Trump’s campaign, contributing over $2 million and providing economic policy guidance.

Bessent’s nomination is subject to Senate confirmation. If confirmed, he will be responsible for implementing the administration’s economic agenda, including tax reforms and policies related to digital currencies. His extensive experience in finance and investment is expected to influence the Treasury Department’s approach to emerging financial technologies.

Initial reaction on X was overwhelmingly positive from all corners, with some praising Bessent’s financial experience and acumen and others pointing out that Bessent is Trump’s first, openly gay Cabinet nominee.

A federal court judge ruled on Monday that Lido DAO, the governing body behind the popular liquid staking protocol, can be treated as a general partnership under state law. 

The court rejected Lido’s claim that it isn’t a legal entity, classifying it as a general partnership and setting a precedent for how profit-driven DAOs are treated.

It was also ruled that identifiable participants were managing the DAO’s operations and, therefore, could not evade liability through its decentralized structure, according to court documents filed in the U.S. Northern District Court of California.

“[The lawsuit] presents several new and important questions about the ability of people in the crypto world to inoculate themselves from liability by creating novel legal arrangements to profit from exotic financial instruments,” Judge Vince Chhabria wrote in his ruling.

Paradigm Operations, Andreessen Horowitz, and Dragonfly Digital Management were implicated as general partners based on their alleged active involvement in Lido governance and operations. 

However, Robot Ventures, another Lido investor, was dismissed due to insufficient allegations of active participation.

General Counsel and Head of Decentralization at a16z crypto, Miles Jennings, said Judge Chhabria’s decision had “dealt a huge blow to decentralized governance” in a statement posted to X on Monday.

“Under the ruling, any DAO participation (even posting in a forum) could be sufficient to hold DAO members liable for the actions of other members under general partnership laws,” he said.

What happened

According to court documents, plaintiff Andrew Samuels purchased LDO tokens on the secondary market in April and May 2023 through the Gemini exchange. 

By December of that year, Samuels filed a class-action lawsuit after incurring losses from purchasing the platform’s native LDO tokens, alleging they were sold to him as unregistered securities, and held Lido DAO liable for the decline in their value.

On Monday, the court agreed with Samuels’ contention, finding Lido’s structure—where token holders govern decisions and earn from staking rewards—constitutes a general partnership under California law. It also found Lido DAO’s lack of direct token sales did not exempt it from liability.

“The courts have construed the statutory phrase ‘offers or sells’ broadly to cover someone who ‘solicits’ the purchase of securities. Samuels has adequately alleged that Lido indeed solicited the purchase of these tokens on crypto exchanges.”

Lido DAO functions as a general partnership, as it involves “the association of two or more persons to carry on as coowners a business for profit forms a partnership, whether or not the persons intend to form a partnership,” the court ruled, citing state law.

Edited by Sebastian Sinclair

J. Christopher Giancarlo, affectionately known as “Crypto Dad,” dismissed speculation that he is being considered to replace Gary Gensler as head of the Securities and Exchange Commission (SEC).

On Thursday,  the former Chair of the U.S. Commodity Futures Trading Commission (CFTC) took to X to deny reports he was seeking the agency’s top job.

“I’ve made clear that I’ve already cleaned up an earlier Gary Gensler[‘s] mess,” he said. “[I] Don’t want to have to do it again.”

He also pushed back against rumors he was seeking “some crypto role” within the U.S. Treasury Department, claiming they were “also wrong.”

The buzz around Giancarlo’s potential return to a regulatory role comes amidst speculation of a shake-up at the SEC following Donald Trump’s re-election, with Gary Gensler’s position as chairman hanging in the balance.

Giancarlo served as a commissioner at the CFTC from June 2014 to April 2019, stepping into the role shortly after Gensler’s departure as CFTC chair.

He earned the nickname “Crypto Dad” as he became a top figure in the crypto community by advocating for crypto innovation during his tenure. 

After stepping down from his role, he co-founded the Digital Dollar Project in January 2020, which seeks to promote discussions on the future of “digital monetary innovations.”

Giancarlo has maintained that central bank digital currencies (CBDCs) are not the only path forward, noting that “crypto, CBDCs, stablecoins, and more” is the global future.

President-elect Donald Trump, whose return to the Whitehouse in January marks a significant comeback for the Republican party, has vowed to quash any future CBDC policy.

The crypto community is bracing for the possibility of Gensler’s departure, as Trump has also promised to replace the current SEC chair, whose term runs until 2026. 

Giancarlo is not the only name being floated; other pro-crypto candidates include SEC Commissioners Hester Peirce and Mark Uyeda, former Binance.US CEO Brian Brooks, and others.

Gensler, a contentious figure in the crypto space, hinted at his possible departure during a speech at the 56th Annual Institute on Securities Regulation on Thursday. 

At the end of the speech, he stated, “It’s been a great honor to serve with them, doing the people’s work, and ensuring that our capital markets remain the best in the world,” referring to his SEC colleagues. 

The pressure on Gensler is at an all-time high this week as 18 states, along with the DeFi Education Fund, filed a lawsuit accusing the SEC of overreaching its authority on crypto regulations.

Filed Thursday, the suit alleges that under Gensler’s leadership, the SEC deliberately bypassed standard procedures and withheld new crypto rules to pursue a “regulatory land grab.”

Edited by Sebastian Sinclair