Donald Trump headlined the Bitcoin 2024 Conference in Nashville. The main thing that got the crowd jazzed was Trump’s promise to fire SEC Chairman Gary Gensler.
He concluded his speech with this memorable line, “Have a good time with your Bitcoin and your crypto, and everything else that you’re playing with.”
Kamala Harris was invited, and her campaign team gave the option serious consideration. There are rumors that her husband is a “crypto guy” and that Harris might shift future policy away from the Biden Administration’s aggressive SEC enforcement.
In the end, she declined. David Bailey, founder and CEO of Bitcoin Magazine and a conference organizer, gracelessly announced the news on X.
His tweet was met with raucous expressions of preference for Trump.
However, Fortune mused that the fact the Democratic nominee contemplated addressing 30,000 Bitcoiners was itself a huge shift. Biden people would have ruled it out of hand, and it’s a sign that Harris may take a different approach.
According to the Financial Times, the Harris Campaign wants to “reset” with crypto companies and its representatives have reached out to Coinbase, Circle, and Ripple in recent days with the stated goal of building a constructive relationship and creating a smart regulatory framework to foster the growth of the industry.
Why is crypto such a big deal for policy-makers? Although the Harris Campaign denies it, it might have something to do with the number-go-up nature of the industry lobbyists.
Crypto companies are opening their digital wallets, and the good people of Washington can be counted on to notice.
Follow The Money
By wooing the Trump Campaign and shmoozing at the GOP Convention, crypto lobbyists are fighting back against Gary Gensler’s SEC. Coinbase, which #DisruptionBanking wrote about here, and Ripple, covered here, have felt the wrath of the SEC firsthand.
Coinbase increased its lobbying expenditures from 80,000 in 2017 to $2.86M in 2023 while Ripple increased from $50,000 to $1.2M during the same period.
Between 2017 and 2023, according to new research by Social Capital Markets, lobbying expenditures by crypto companies increased by 1386% from $2.72 million to $40.42 million.
Representatives of Coinbase and Ripple attended the GOP Convention, along with Andreessen Horowitz, the VC tech giant.
When Co-founders Ben Horowitz and Marc Andreessen announced that they were supporting Trump, Horowitz complained of the SEC, “They have just fought us every step of the way, and using very nefarious means. They are nuking the industry.”
Those three firms, along with the Winklevoss twins, are reportedly major contributors to Fairshake, a pro-crypto super PAC, which put together a $160-million war chest that has D.C. politicians all aquiver or alternately up-in-arms.
Crypto firms are pushing for less regulatory oversight of their industry, and if Trump wins in November, it’s a sure bet that Gary Gensler will be sent packing in January 2025. The leading lights of the crypto ecosystem would like nothing better.
Trump’s Evolution on Digital Currencies
Although now seen somewhat as its savior, Trump was not always gung-ho on crypto. While serving as President, Trump was consistently critical of cryptocurrencies.
He said: “We have only one real currency in the USA and it will always stay that way. It is called the United States Dollar!”
As late as 2021, Trump labeled Bitcoin as a scam and a “disaster waiting to happen.”
Given the sheer number of hacks and frauds, especially the catastrophic collapse of FTX in November 2022, it would seem Trump’s instincts were correct.
Nevertheless, there were undercover Bitcoin bros likely whispering in his ear. According to emails obtained by Coindesk with a FOIA request, Jared Kushner, a senior adviser in the Trump White House, was advocating for digital currencies behind the scenes. Sounds like a crypto-evangelist.
Kushner emailed Steve Mnuchin, Treasury Secretary, arguing that a digital dollar “could change the way we pay out entitlements as well saving us a ton in waste fraud and also in transaction costs.”
Sounds like a crypto-evangelist to me.
Trump Pivots
By March of 2024, Trump started to publicly pivot his position on crypto, drawing a contrast between himself and President Biden. By May of 2024, Trump completely walked back all of his previous criticism of cryptocurrencies, promising to protect crypto at the libertarian convention.
It’s possible Trump had a real change of heart about cryptocurrencies. Maybe he’s a true believer, but nothing he has said on the topic suggests he has any interest in or understanding of how it works. More likely, his embrace of the crypto industry is purely transactional. Crypto companies are ready to shell out good money for their preferred policies, and it’s well-known there’s no better way to get Trump’s attention.
In June of 2024, Trump appeared at the San Francisco mansion of venture capitalist David Sacks for a pricey fundraising event that brought in $12 million for his campaign. Among those in attendance were the chief legal officers of both Ripple and Coinbase. At the dinner, Trump promised to loosen crypto regulations and embrace innovation.
Seated in between David Sacks and Chamath Palihapitiya, the former president informally polled the room on who should be his running mate. The resounding response was J.D. Vance. Indeed, Vance had organized the fundraising dinner and spent the past half a year shoring up support for Trump from the several Silicon Valley billionaires in his rolodex, which include Peter Thiel, Elon Musk, and Sacks.
Peter Thiel was privately pushing Trump to pick Vance as his VP, and now that Trump has done so, Thiel has announced that he is warming to a second Trump term, despite his recriminations and misgivings about the first one.
Crypto Woos Democratic Senators
Meanwhile, as reported by Bloomberg, crypto investors have amassed a $160 million fund to spend during this political season. Besides crypto investors’ dislike of Gensler’s hardline stance on crypto, they have aimed at Ohio Senator Sherrod Brown, who is Senate Banking Committee Chair and up for reelection. Long critical of crypto, Brown faces negative ads funded by a large crypto-funded war chest.
Coinbase has also hosted two town halls in Ohio to bolster support for crypto while also running ads encouraging Ohioans to talk to their representatives. Senator Brown has pushed back against his detractors, citing the meltdown of FTX and crypto’s potential use for funding terrorism, which has been in the spotlight since the Hamas attack in Israel last October.
Echoing Senator Brown’s skepticism, SEC Chairman Gary Gensler issued a sick burn in an interview with Bloomberg, “This is a field where the leading lights from a couple of years ago are either in jail, about to go to jail, or awaiting extradition.”
However, not all Democrats are unmoved by lobbying efforts by the crypto industry. Coinbase has recruited former Ohio representative Tim Ryan and former Senator Pat Toomey to serve on an advisory council.
Democrats Get The Memo
Brad Garlinghouse, the CEO of Ripple, laid out the issue for the 2024 election, saying “The Dems aren’t winning any votes for being anti-crypto (and thus anti-innovation), while the Republicans are gaining votes for embracing and encouraging innovation here in the US. It’s time to catch up with so many other leading economies and governments with clear rules of the road.”
Democratic leaders seem to have gotten the message, belatedly. On July 26, Jaime Harrison, Chairman of the Democratic National Committee, posted a formal letter calling on Democratic politicians to put aside their hostility to digital assets and blockchain technology and “take a forward-looking approach.” In the letter, the DNC blames negative voter perceptions of the party’s view of this “transformative technology” on the SEC’s persecution of all things crypto.
The letter includes four key actions the party should take to support innovation in digital assets, and one of them, funny enough, is replacing Gary Gensler with a “pro-innovation SEC chair.”
The sudden about-face of the DNC three months before a major election may be too little too late for many voters. It also begs the question of what the point was of Gary Gensler’s war and who in the Democratic Party, besides Elizabeth Warren, was telling the administration that it was a good idea.
If not just for the campaign donations, Democratic policymakers owe it to their voters, 19% of whom have bought crypto, to keep an open mind.
Author: Laird Dilorenzo
#Crypto #Blockchain #DigitalAssets #DeFi
Laird Dilorenzo is a hatchet thrower and wordsmith.
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.