Sam Bankman-Fried is living at the Metropolitan Detention Center in Brooklyn, while his 25-year sentence is being appealed, a process likely to take years. He has been assigned 37244-510. But his work— the crypto industry buying Congress— continues unmolested, <> stronger than ever. The industry is putting millions of dollars into races to buy seats and have already succeeded in several seats. What do they want? Public Citizen: “Just as Big Oil tries to thwart climate regulations and insurance companies try to thwart health care reforms, the crypto sector’s political spending is intended to stop enforcement crackdowns, block regulation that prevents fraud, and defeat candidates who support either.”
Yesterday, Reuters reported on yet another crypto-PAC— a third one this cycle: Stand with Crypto. It was started by Coinbase and the outfit behind it has 440,000 members. So far their endorsed candidates are:
Jim Banks (R-IN)
Jim Justice (R-WV)
Shomani Figures (D-AL)
Eddy Morales (D-OR)
Troy Downing (R-MT)
Crypto super PACs Fairshake, Defend American Jobs and Protect Progress have so far raised more than $110 million this election cycle, according to Federal Election Commission records.
The involvement in this year's elections comes as the industry faces some scrutiny after FTX founder Sam Bankman-Fried was found guilty last year of stealing from customers. Prosecutors allege he used those funds to donate more than $100 million to U.S. political campaigns.
PACs like Stand With Crypto are typically set up to gather funds for candidates or political causes; they differ from super PACs, which can receive donations of unlimited size but cannot coordinate with campaigns directly.
Stand With Crypto’s chief strategist, Nick Carr: “Launching this federal PAC will take Stand With Crypto’s advocacy on behalf of crypto voters to the next level. SWC is already 440,000 advocates strong nationwide and is growing every day, and this PAC will allow our members to have an even louder voice in both DC-based decision making and in November’s elections. Crypto voters are diverse and bipartisan, and are looking for candidates on both sides of the aisle to support in November.”
With the kind of money— and the criminal ethos— crypto is throwing around, you know exactly who’s embracing them wholeheartedly… even if it means a major flip flop. Yes, Señor T. Yesterday, Jasper Goodman reported that “Trump told crypto backers at Mar-a-Lago on Wednesday that they ‘better vote’ for him because of the way the Biden administration has unleashed a regulatory crackdown on the industry. ‘They are against it,’ he said at an event promoting his own non-fungible token, or NFT.”
Trump’s overt play for the crypto faithful is a big shift from the criticism he dished out in his first term, but it’s not unexpected. The GOP has become increasingly friendly toward bitcoin and other digital assets in recent years, while key Democrats remain at odds over whether to grant the industry legitimacy after a series of scandals. Trump’s direct embrace is a landmark moment for crypto firms that have undertaken an intense Washington lobbying effort and are spending tens of millions of dollars to influence the 2024 elections.
“President Trump’s remarks signal a sea change in the importance of digital assets this election cycle,” said Kristin Smith, CEO of the Blockchain Association, a top crypto industry lobbying group.
The issue is giving Trump a fresh line of attack on Biden. Securities and Exchange Commission Chair Gary Gensler, a Biden nominee, has pursued an extensive series of enforcement actions against crypto firms that he says are flouting federal securities laws. The White House on Wednesday angered crypto advocates when it threatened to veto bipartisan House legislation that would undo SEC guidelines the industry hates.
“Gensler is very much against it,” Trump said Wednesday of the administration’s approach to crypto. “The Democrats are very much against it.”
Not all Democrats are against it. Twenty-one Democrats on Wednesday defied Biden’s veto threat and joined with Republicans in voting for a resolution to overturn SEC crypto guidance. Trump’s embrace could add a new partisan tinge to the debate over crypto regulation— a risk for the industry, which is courting both sides.
By and large, most of the Democrats voting with the entire GOP on this have corruption in their souls and their DNA: Josh Gottheimer (D-NJ), Ritchie Torres (D-NY), Henry Cuellar (R-TX), Jared Moskowitz (D-FL), Darren Soto (D-FL), Jake Auchincloss (D-MA), Don Davis (D-NC), Mikie Sherrill (D-NJ), Jim Costa (D-CA)…
Goodman noted that “key Democrats like Sen. Elizabeth Warren have stood in the way of industry-friendly policies while warning of risks to consumers and the financial system, as well as crypto’s role in financial crime.”
It’s unclear, though, whether courting digital asset traders can win a significant number of votes. A Pew Research Center Survey released last year found that most Americans weren’t confident in crypto’s safety or reliability. The industry has suffered major blowups in the last few years, including the implosion of the FTX exchange in a huge fraud scandal and the U.S. government’s $4.4 billion settlement with the Binance exchange over allegations that it facilitated financial crimes.
A poll released by crypto industry groups this week showed that more than 20 percent of voters in six key swing states identify crypto as a major issue. A separate nationwide survey of registered voters commissioned by the crypto firm Paradigm found that crypto ownership is higher among communities of color and young people— key constituencies that helped boost Biden in 2020 but are now proving to be challenging for him to win over.
Crypto has gained support from politicians on the right who tout it as an alternative to the mainstream financial system. The Paradigm poll found earlier this year that crypto owners favor Trump over Biden, 48 percent to 39 percent, with 13 percent undecided.
“President Trump understands freedom and liberty, he knows that innovation needs to be protected here in America and he knows that the role government should play is to make sure we create an environment in which innovation grows and prospers,” said Ohio GOP Senate candidate Bernie Moreno, a longtime crypto booster. “That’s why it’s no surprise to see him making those comments about crypto.”
Former Republican presidential hopeful Vivek Ramaswamy, who is seen as a potential cabinet official in a second Trump administration, championed crypto during the GOP primary and helped push the former president to come out against the adoption of a government-backed central bank digital currency. Crypto firms also oppose a potential Federal Reserve digital currency, and conservatives warn it’s a threat to privacy.
“I was impressed with President Trump’s ability to dive deep into a subject area that was newer to him,” Ramaswamy said in an interview last month.
Ramaswamy declined to comment on whether he hopes to work on crypto policy in a second Trump administration, saying he is “focused on winning the election.”
Trump’s support for digital assets wasn’t always a given. He derided crypto on social media during his presidency, and key cabinet members took a skeptical approach to the industry. Trump’s SEC chair initiated major litigation against a prominent crypto firm.
But Trump has gone on to dabble in crypto since leaving office. He has issued his own NFT, and as of last August he owned $2.8 million in a crypto wallet.
“It’s pretty remarkable to see, in the few years since he’s left office, the 180 that he has done on crypto,” said Cody Carbone, chief policy officer at the Chamber of Digital Commerce, a crypto advocacy group. “It’s pretty great to see him come out and be supportive of the industry.”
Trump’s embrace of crypto carries potential risks. Digital asset markets have experienced dramatic booms and busts in recent years, and key industry players like Sam Bankman-Fried have been sentenced to prison time for breaking the law.
The shift also carries risk for Washington’s crypto lobby. Trump could make the politics of digital asset regulation even more partisan moving forward. The industry has spent years— as well as millions of dollars in campaign contributions— trying to build support in both parties, which will likely be key to enacting legislation that crypto firms want.
“I don’t want this to become a partisan issue,” Carbone said. “I think this presents an opportunity for Democrats to start to really have an introspective look and educate themselves on the benefits of digital assets.”