Congress Passed The Bill Bankman Fried Paid Them To Pass— America Will Regret It
This is my 50th post under the tag “cryptocurrency,” the last before this one being How Do You Know If A Member Of Congress Is Too Corrupt To Vote For? Are They In Bed With Crypto? That’s not an outlier. My general theory— going back to when Sam Bankman Fried was a heroic figure in Congress— was basically that any member of Congress, regardless of party, took a dime from Bankman Fried and his crooked crypto-cronies should be thrown in a dark cell for the rest of their lives. Today Bankman Fried is in a dark cell but all those bribes he paid to members of Congress… case closed— uninvestigated. If it was investigated there would be something like 200 members of Congress in prison. And doesn’t that sound like the greatest idea you ever heard?
But these criminals take care of themselves and they— since it was so safe and nothing happened to even the most blatantly criminal congressional characters, like Tom Emmer (R-MN), Ritchie Torres (D-NY), Josh Gottheimer (D-NJ), Patrick McHenry (R-NC), Erin Houchin (R-IN), Maxwell Frost ((D-FL), Byron Donalds (R-FL), Ted Budd (R-NC), Warren Davidson (R-OH)… not to mention all the party leaders— are brazenly accepting crypto-bribes again, as if nothing had ever happened. Sam Bankman who? Never heard of him.
On Thursday, Bankman Fried’s and all the other crypto-crooks’ dream came through— all those millions of dollars in bribes paid off when the House pass Glenn Thompson’s Financial Innovation and Technology for the 21st Century Act (H.R. 4763). Thompson had a who’s who in crypto-bribes as co-sponsors including Tom Emmer (R-MN), Ritchie Torres (D-NY), Warren Davidson (R-OH), French Hill (R-AR), Patrick McHenry (R-NC), Jim Banks (R-IN), Wiley Nickel (D-NC), Henry Cuellar (D-TX)… The bill passed 279-136, 3 Republicans and 133 Democrats refusing to come to the party.
The 71 Democrats— along with 208 Republicans— who voted for it were generally the criminal congressmen who took all those bribes: characters like Josh Gottheimer (D-NJ), Peter Aguilar (D-CA), Rob Menendez (D-NJ), Nancy Pelosi (D-CA), Don Davis (D-NC), Darren Soto (D-FL), Jake Auchincloss (D-MA), Nikki Budzinski (D-IL), Ritchie Torres (D-NY), Robert Garcia (D-CA), Jim Costa (D-CA)…
The main thing the crypto-criminals wanted— and what they got— was to make sure the industry would be regulated by the incompetent joke agency, the easy to bribe CFTC rather than the SEC. There’s a good chance it won’t get through the Senate. Maxine Waters (D-CA): “This represents an extreme MAGA libertarian approach where companies can operate without regulatory scrutiny and consumers and investors are on their own in detecting and avoiding fraudulent schemes... I’ve seen many efforts by Republicans acting at the behest of the industry to pass deregulatory regulation, but this is perhaps the worst, most harmful proposal I have seen in a long time.”
This morning, Brendan Pedersen reported that the crypto-criminals trying to buy Congress tried a different strategy than the one Bankman fried used. “Rather than unleashing an indiscriminate money cannon in 2024, affiliated crypto PACs including Fairshake, Defend American Jobs and Protect Progress have picked races that aren’t always high-profile… [Ryan Selkis, U]nofficial spokesperson: ‘We’re fighting for open seats and generation change at the primary level. I like moderates, compromise-minded Democrats in the House. But in the Senate, we’ve gotta go red, red, red.’” That’s very bad news for Jon Tester and Sherrod Brown— and a direct threat to Schumer to either pass the bill the House just passed or lose any chance of keeping the majority.
Pedersen noted that “Low-profile challenger candidates who’ve received strong support from crypto PACs include Julie Johnson of Texas and Shomari Figures of Alabama, both Democrats who won competitive primaries this year. Johnson saw just under $1 million in support from Protect Progress, while Figures benefited from $1.8 million. Other Democratic candidates in the mix include Baltimore County Executive Johnny Olszewski and Eugene Vindman, a retired United States Army infantry officer running in Virginia. Democratic House members running for Senate are also making crypto-friendly noises. Reps. Adam Schiff (D-CA), Elissa Slotkin (D-MI), Ruben Gallego (D-AZ) and Andy Kim (D-NJ) all voted in favor of FIT this week… Then there is the crypto industry’s white whale: Sen. Elizabeth Warren (D-MA). She has two Republican candidates— both longshot challengers— with crypto ties competing to take her on in the general election. For now, Warren isn’t too worried. ‘I don’t know who, as a candidate for office, wants to stand up and defend North Korea financing half of their nuclear missile program with crypto,’ Warren told us. ‘That’s just nuts. But if somebody wants to run on that, have at it.’”
Yesterday, Politico even hinted something might not be exactly right in Denmark. Jasper Goodman and Eleanor Mueller reported that, despite bing used by so few Americans, crypto is “starting to have an outsize impact on U.S. politics and policy. The crypto industry won several eye-catching victories this month that showcased its growing influence on the levers of power in Washington— something that’s poised to expand as it prepares to spend more than $80 million on the 2024 elections... [T]he industry’s super PACs have made progress in boosting allies— including by helping crypto-friendly Democrats win primaries.”
Republicans who were already aligning themselves with the crypto world are leaning into the embrace even further. Former President Donald Trump is increasingly pledging to support the interests of digital asset traders, and he’s starting to accept campaign contributions in crypto.
“It’s a huge moment for the crypto industry in the United States,” said David McIntosh, a former Republican lawmaker who leads the [super-corrupt] crypto-friendly conservative group Club for Growth.
The sudden burst of support for an industry with a relatively small base of users is the culmination of a yearslong effort to win legitimacy— and lighter-touch regulatory treatment— in Washington. The push, which is now backed by tens of millions of dollars in political spending funded by crypto executives and investors, is proving to be resilient in the face of major scandals that have sent industry leaders to prison and highlighted risks in what critics deride as the “Wild West” of finance.
It’s all starting to scramble U.S. politics, especially for Democrats.
“I feel like I did this before the 2008 crash,” Warren said in an interview. “I kept saying that failure to regulate a multibillion-dollar industry will not end well. I still feel that way.”
Crypto’s week in Washington illustrated a true “high watermark,” as House Financial Services Chair Patrick McHenry (R-NC), an industry ally, repeatedly dubbed it.
The House on Wednesday passed legislation in a 279-136 vote that would create a regulatory regime tailored for crypto, the first time either chamber of Congress has taken such a step. A stunning 71 Democrats supported the GOP-led legislation, including Pelosi, Democratic Caucus Chair Pete Aguilar and House Minority Whip Katherine Clark.
The House passed the bill just days after Schumer and 10 other Senate Democrats ignored a White House veto threat and helped pass a resolution that would repeal Securities and Exchange Commission crypto guidance that had drawn strong opposition from the industry.
The White House took a more diplomatic stance before Wednesday’s crypto bill vote. The administration said it opposed the legislation, which would restrict the SEC’s digital assets authority and empower the smaller Commodity Futures Trading Commission, but it stopped short of a veto threat. Instead, the White House said it was “eager to work with Congress” on the issue.
“Last week was just a flash of light,” House Majority Whip Tom Emmer said. “Is it possible the administration is pulling back a little bit from Elizabeth Warren?”
The new posture pleased allies of President Joe Biden who want him to embrace crypto. Mark Cuban, who has publicly lobbied Biden and his regulators to take a more industry-friendly approach, said “the administration is making strides to understand that the [U.S.] is the home of technological innovation and we need to continue that path with crypto.” Democratic Rep. Marc Veasey of Texas said Cuban’s pitch helped him decide to back pro-crypto policy this month.
The moves echo the positive crypto vibes emerging on the campaign trail. Trump recently became the first major party presidential candidate to accept crypto donations after previously calling on digital asset supporters to vote for him. His campaign attacked Biden and Warren in a statement, saying “MAGA supporters … will build a crypto army moving the campaign to victory” in the fall.
“We cannot hand this issue to Republicans,” said Rep. Wiley Nickel of North Carolina, a Democrat who privately lobbied the White House to not oppose Wednesday’s bill.
The crypto fight could endanger Democrats’ narrow Senate majority. Industry-backed super PACs that entered the year with more than $80 million are threatening to spend in the pivotal Senate races in Ohio and Montana, where Sens. Sherrod Brown and Jon Tester— both crypto skeptics— are facing tough reelection contests.
The super PACs have already shaken up an array of races. Fairshake, Defend American Jobs and Protect Progress have succeeded in boosting allies, including in House races in Maryland, New York, Texas and Alabama, and in Senate contests in California, Indiana and West Virginia.
The groups have shown a willingness to change course when candidates move in crypto’s direction. They initially threatened to spend in the Maryland Senate primary, but stayed out of the race after the leading candidates revealed to Politico that they were pro-crypto.
The super PAC network is closely watching the signals that Brown, Tester and Schumer are sending.
Schumer and other New York Democrats have also been lobbied by home-state interests, including New York State Department of Financial Services Superintendent Adrienne Harris and New York City-based firms. The top Senate Democrat said in a statement after backing the SEC regulation rollback that “New York State already has a strong law on the books, and they weren’t consulted on this regulation.”
Some major Democratic donors in Silicon Valley have helped crypto’s lobbying. Venture capitalist Ron Conway, a top contributor to Democratic causes whose firm has invested in crypto startups, has advocated for industry-friendly regulatory changes. Conway, who did not respond to a request for comment, has previously met with lawmakers including Pelosi alongside crypto executives and is seen by crypto lobbyists as a key conduit with top Democrats.
The crypto PACs are funded by companies that have pushed hard for the legislation Congress advanced in recent weeks, including the digital asset firms Coinbase and Ripple and the venture capital firm Andreessen Horowitz.
Bankman Fried deserved what he got, but, truth be told, he was the fall guy for hundreds of people who were part of a massive criminal conspiracy— people in the industry, people in Congress, his family, people in the finance sector… And when this Ponzi scheme all comes tumbling down, American taxpayers will be left on the hook for billions of dollars.
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