Trump 2.0: Assessing the Impact on the Regulatory Landscape
With Donald Trump back in the White House for a 2nd term, the financial services industry is bracing for a shift in tone, priorities and approach to enforcement. While the U.S. has historically maintained a strong stance on AML (Anti-Money Laundering), sanctions enforcement and financial crime prevention, Trump’s second administration may introduce regulatory rollbacks, shifts in enforcement focus and a more business-friendly stance, particularly in the digital assets space. See the key areas of impact and how organisations can prepare for regulatory uncertainty.
Sanctions
Trump's first term was characterised by an aggressive use of sanctions as a foreign policy tool. His administration imposed over 5,000 designations, with a clear focus on Iran, Venezuela, China and Russia. His second term has already seen significant application and rollback of sanctions. His second term so far has been marked by the extensive use of tariffs as a foreign policy tool, with some notable adjustments in sanctions policy.
- Sanctions on Israeli settlers in the West Bank have been lifted
This lifting of these sanctions signals a potential shift in the U.S.'s approach to Middle Eastern geopolitical conflicts, with a more lenient stance towards Israeli settlement activities in the West Bank.
- Sanctions enforcement against Russia remains unclear
Trump has vowed additional measures if Russia does not end its "ridiculous war" in Ukraine but has not yet explicitly committed to maintaining the Biden administration’s full suite of restrictions. - New sanctions imposed on the International Criminal Court (ICC)
Trump has imposed sanctions on the International Criminal Court through an executive order, accusing it of attacking the U.S. and its ally Israel. The order gives powers to impose asset freezes and travel bans against ICC staff that the U.S. deems to be involved in investigations against itself or certain allies. The move echoes his 2020 Executive Order 13928. - Drug cartels designated as Foreign Terrorist Organizations (FTOs)
The administration has created a process to designate Mexican drug cartels as FTOs and this action will put additional pressure on financial institutions to enhance their CDD (Customer Due Diligence) and transaction monitoring programs related to cross-border payments, particularly those linked to Latin America. - Cuba re-designated as a State Sponsor of Terrorism
This action reintroduces significant restrictions on transactions involving the country.
Impact on AML/CFT Regulatory Landscape
While sanctions policies signal a shift in foreign policy priorities, domestic financial regulation under Trump’s second term is also poised for change. A core theme of Trump's 2024 campaign was deregulation, and his administration has already enacted a regulatory freeze on new rules across government agencies, including the Department of the Treasury and FinCEN.
Additionally, Project 2025, a policy framework aligned with Trump’s agenda, proposes significant budget cuts to key regulatory and enforcement bodies such as FinCEN and OFAC, potentially weakening the U.S.’s capacity to detect, investigate, and prosecute financial crimes. It also emphasises reducing compliance burdens on businesses, which could lead to looser AML obligations for financial institutions and create vulnerabilities in areas like cross-border transactions and digital assets. However, the likelihood of a wholesale dismantling of AML frameworks remains low.
Potential rollback of beneficial ownership requirements
Trump’s administration may seek to amend or repeal aspects of the Corporate Transparency Act (CTA), which requires companies to disclose beneficial owners to FinCEN. This comes amid legal uncertainty, as the federal government is appealing a court order that blocked the enforcement of the CTA’s beneficial ownership information (BOI) rule. The government has also sought a stay pending the outcome of the appeal, but the long-term future of the CTA remains unclear. This legal challenge could open the door for the administration to advance its deregulatory agenda, potentially targeting the scope and enforcement of beneficial ownership requirements.
Digital Assets Regulation
One of the most significant shifts under Trump 2.0 is his administration's proactive support for digital assets. The recent Executive Order on Digital Financial Technology marks a clear break from Biden-era policies, emphasising regulatory clarity, private-sector-led solutions and support for USD-backed stablecoins.
- Crypto-friendly administration
Trump’s administration is expected to reverse the Biden-era restrictions that discouraged banks from working with crypto firms. - Clearer regulatory guidelines
The newly established Working Group on Digital Asset Markets, chaired by David Sacks, is tasked with developing a crypto regulatory framework within 180 days. - SEC leadership shift
Paul Atkins, a known proponent of digital assets, is set to lead the SEC, signalling a likely departure from the aggressive enforcement actions seen under Gary Gensler.
With greater regulatory clarity, crypto firms may see more formalised AML expectations, particularly around travel rule compliance, KYC requirements, and transaction monitoring. Financial institutions should prepare for increased integration of digital assets within the traditional banking system, necessitating enhanced due diligence (EDD) measures.
Enforcement of Compliance Failings
While the U.S. will continue to play a major role in global AML enforcement, there could be a shift in priorities.
- Fewer high-profile enforcement actions
The record-breaking $3 billion TD Bank fine seen under Biden’s tenure might be less likely under Trump’s DOJ, although there have already been major fines handed out in 2025 for regulatory failings.
- Less regulatory activism
Trump-appointed regulators, including those at FinCEN and the OCC, may adopt a more industry-friendly approach, potentially leading to looser interpretations of compliance obligations.
Conclusion
Despite the promise of potential deregulation, financial institutions should not expect an outright dismantling of AML and KYC frameworks. Instead, the more likely impact will be a shift in enforcement priorities and a more permissive stance on digital assets. In this uncertain geopolitical landscape, it is vital for firms to be proactive and ensure they have robust compliance frameworks in place.
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