Lina Khan is a Rorschach test for techies. For some, she is a boogeyman—an adversary of innovation and an impediment to acquisitions due to her antitrust concerns. And for others, she’s a champion for so-called “Little Tech” and a scourge to the monopolists stifling progress.
That’s to say, her inevitable departure as chair of the Federal Trade Commission under the new Trump administration won’t be universally celebrated across tech. The same is true for any new regulatory reality that will come with the transition, regardless of what the recently jubilant investors might say after Donald Trump’s election victory.
I caught up with Bradley Tusk, a regulation whisperer for VCs, famous for his work on early public affairs campaigns for Uber. Today, Tusk is the CEO and cofounder of his own venture firm, which has invested in companies often skirting legal fine lines such as crypto issuer Ripple, betting site FanDuel, and scooter and bike service Bird.
The prevailing wisdom is that Trump will usher in a new era of deregulation, with an even more hands-off approach than his previous term. And don’t forget this year’s all-important Supreme Court decision that struck down the longstanding Chevron doctrine, meaning that federal agencies will have less autonomy when it comes to rulemaking.
The sea change with crypto is a sign of what's to come: Trump’s SEC chair, Jay Clayton, was certainly no fan of digital assets, bringing the damaging—and still ongoing—lawsuit against Ripple for allegedly issuing unregistered securities during his last days in office. As I wrote about last week, Trump has since embraced blockchain, and will likely appoint a more crypto-friendly face at the SEC. Names thrown around include former CFTC commissioner Christopher Giancarlo, who proudly displays his nickname of “CryptoDad” on his website, and Robinhood’s chief legal officer Dan Gallagher.
“Just getting a regulator who is not instinctively anti-crypto and anti-fintech at the SEC will be really, really meaningful,” Tusk told me, “independent of what the actual regulations become.”
But outside of crypto, what will tech regulation under Trump look like? Khan’s legacy is an obvious question mark. Sure, with her antitrust lawsuits against Big Tech, she put a chill on the M&A market. And after her presumed departure, that market may heat up, allowing more startups to be acquired.
But, as Tusk put it, are there tangible examples of any deals she blocked that actually hurt VC portfolios? He said he couldn’t think of any. “You’re kind of making her a scapegoat, but the reality is, her going after a giant industry or monopoly has nothing to do with private company exits,” Tusk told me.
Even with Vice President-elect JD Vance—and other Republicans like Missouri Sen. Josh Hawley—supporting her antitrust campaign, the next FTC chair and Justice Department is unlikely to pursue the same bruising approach. Just look at the speed at which the big tech CEOs, from Meta’s Mark Zuckerberg to Apple’s Tim Cook, have lined up to kiss Trump’s ring. “When you have a reputation for being totally susceptible to flattery, then people understand that they should flatter you,” Tusk said.
Besides other areas where Trump could have an impact, from autonomous vehicles to digital health supervision, the more intriguing question is whether federal supervision matters that much. As we witnessed the past couple of years with crypto, when there is gridlock at the federal level, states often step in, such as New York implementing its own stablecoin framework as Congress dragged its feet. According to Tusk, the state and municipal level is where the “vast majority” of tech regulation happens. And the result is often just a confusing patchwork of state laws.
That’s likely where the battles over technology oversight, from AI to content moderation, are likely to occur over the next four years. “When we're in a world of a perceived completely dysfunctional Washington, D.C., some states tend to be the ones to step into the void,” Tusk said.
Leo Schwartz
Twitter: @leomschwartz
Email: leo.schwartz@fortune.com
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