Not One Politician Was Charged In FTX Bribery Scandal— Now Congress Is Selling Out To The Crypto-Mob

Congress And, Of Course, Trump

Bankman Fried bought Tom Emmer a place in House GOP leadership

Sam Bankman Fried is in prison— at least for now— but the crypto-criminal Mafia he helped cobble together is working to elect corrupt conservatives across the country— including Trump. Their SuperPACs— including Fairshake, Protect Progress (one of Bankman Fried’s old operations) and Defend American Jobs— have over $300 million in the game already, much of it from predator-billionaires and multi-millionaires like Marc Andreessen, Ben Horowitz, the Winklevoss twins, Fred Wilson, Brian Armstrong, Phil Potter, Avichal Garg, Curtis Spencer, Fred Ehrsam, Matt Huang, Wences Casares and directly from crypto-organizations and their financiers like Coinbase, Ripple Labs, Payward, Jump Crypto, Circle Internet Financial, Lightspark Group, Multicoin Capital, Ark Invest… It’s worth noting that at least half of the big corporate SuperPAC donors have settled or are facing charges by the SEC for violating securities laws.

Who have they spent the most against? Good government progressives Katie Porter (D-CA), Jamaal Bowman (D-NY), Cori Bush (D-MO). And who are they spending the most to back? Corrupt conservatives Josh Gottheimer (D-NJ), Jim Justice (R-WV), Tom Emmer (R-MN), Jim Banks (R-IN) and Blake Masters (R-AZ), who’s defeated Tuesday. Aside from electing Trump president, their biggest goal is to throw the Senate to the GOP by defeating Sherrod Brown (D-OH) and Jon Tester (D-MT).

Several former members of Congress who didn’t care they would be viewed as scumbags, went to work lobbying for crypto-criminal enterprises, including Joe Crowley (D-NY), Mike Conaway (R-TX), Blanche Lincoln (D-AR), Ron Klein (D-FL), Bart Gordon (D-TN), Phil English (R-PA), not to mention 3 staffers each from Mitch McConnell, John Cornyn and. Of course, Chuck Schumer.

Tuesday, a sudden influx of crypto-cash defeated progressive frontrunner Raquel Terán and helped elect crypto-shill Yassamin Ansari (also an AIPAC shill). Well over a million dollars were spent against Terán by Trump/crypto bros— just in the last week.

Yesterday, Freddy Brewster reported that the crypto-criminals “are on an unprecedented spending spree to oust politicians opposed to their agenda and to help elect pro-crypto candidates in the 2024 election cycle.” The agenda he’s referring to is to prevent effect regulation that would protect the public from their predations and systematic frauds. That simple— they don’t want to be regulated in any meaningful way. “Crypto’s booming influence,” he wrote, “is already in effect: The industry notched wins against politicians who opposed their regulatory agenda during the primary elections, former President Donald Trump has been parroting lobbyists’ questionable data on crypto’s use among Americans, and Sen. J.D. Vance (R-OH), Trump’s running mate, has deep ties to the crypto industry. Vance introduced a bill in 2023 that would shield banks from regulatory pressure to cut ties with customers over reputational risks— allowing them to work more freely with the crypto, gun, and oil and gas industries.”

Traitors like Vance are working to allow GOP-aligned bad actors like Russia to avoid international sanctions by using crypto in international trade. “Russian lawmakers passed a bill yesterday that will allow businesses to use crypto currencies in international trade, as part of efforts to skirt Western sanctions imposed after Russia's invasion of Ukraine. The law is expected to go into force in September, and Russian central bank Governor Elvira Nabiullina, one of the backers of the new law, said the first transactions in cryptocurrencies will take place before the end of the year. Under the new law, the central bank will create a new ‘experimental’ infrastructure for cryptocurrency payments, but the new law will not lift an existing ban on cryptocurrency payments inside Russia. The central bank said that delays in payments have become a major challenge for the Russian economy, leading to an 8% decline in Russian imports in the second quarter of 2024.”

The industry’s lobbyists and donors will likely push key provisions from a shelved bill that would strip oversight authority from the aggressive and heavily-staffed Securities and Exchange Commission, and give it to the less-staffed and less-funded Commodity Futures Trading Commission. The bill could also undermine investor protections, and reduce the ability for states to enforce their own securities laws for cryptocurrencies, experts told The Lever.

As regulations for the nascent industry are still taking shape, this election could define how the crypto industry will be regulated for millions of consumers going forward— and major crypto companies, such as Coinbase and Ripple Labs, as well as venture capitalist firms like a16z, formerly known as Andreessen Horowitz, have poured tens of millions of dollars into the fight.

In a press release describing its political spending, Ripple said the 2024 elections “will be the most consequential in crypto's history.”

"Ripple will not— and the crypto industry should not— keep quiet while unelected regulators actively seek to impede innovation and economic growth that millions of Americans utilize,” said Ripple CEO Brad Garlinghouse. “The crypto industry intends to remain heavily invested in this effort until we see meaningful change."

Coinbase, the largest U.S.-based crypto exchange, issued a “call to action” to the alleged 52 million Americans who own crypto to advocate for more pro-crypto policies, however most of the action, money, enthusiasm is coming from just a handful of wealthy people. 

“The bulk of the money and energy is coming from half a dozen people,” said Mark Hays, a senior policy analyst for Americans for Financial Reform, a nonprofit dedicated to consumer protection and strict Wall Street regulations. “It’s [Andreessen Horowitz], it’s Ripple, it’s Coinbase… and not to be crass, but kind of white, male, billionaire Silicon Valley folks who are really looking to shape political outcomes to serve their business objectives through policy.”

The crypto industry has also targeted Gary Gensler, chair of the Securities and Exchange Commission (SEC), who has staunchly enforced securities law. Crypto companies have often said that current law lacks clarity for cryptocurrencies, but Gensler has levied dozens of enforcement actions against the industry, accusing some companies of offering unregistered securities.

“Breaking the law and not liking the law are different than lack of clarity and, with all due respect, I think that is what we have a lot of in this field,” Gensler said during a recent Senate hearing on June 13. 

…Crypto’s boom came to a screeching halt in 2022 after three major exchanges— Celsius, Terra and Bankman-Fried’s FTX— failed. With the collapse of these online platforms, where digital currencies were bought, sold, and traded, millions of Americans lost access to their funds. Some people lost their life savings, and because the funds are not thoroughly regulated, many of the funds cannot be fully recovered. 

Now, as the 2024 election looms, crypto companies have discarded their old messaging of fighting big banks and standing up for the little guy, by partnering with major banks, leaning into libertarian values, and casting their support for Trump. 

This includes the founder of Kraken, an exchange that allegedly violated sanctions against Iran;  the Winklevoss twins, two brothers who were former business partners with Mark Zuckerberg in the early days of Facebook, who went on to create their own crypto exchange called Gemini; and others. 

“President Donald J. Trump is the pro-Bitcoin, pro-crypto, and pro-business choice,” Tyler Winklevoss posted on Twitter. “It’s time to take our country back. It’s time for the crypto army to send a message to Washington. That attacking us is political suicide.”

Trump has reportedly raised more than $4 million in cryptocurrency donations for his reelection. When he spoke at a bitcoin conference on July 27, he pledged to fire SEC chair Gensler “on day one,” and promised to make the U.S. “the crypto capital of the planet.”

Trump later held a conference after the event that reportedly cost $8000,000 to attend.

Leading the crypto industry’s political movement is Fairshake PAC, a crypto-backed political action committee that has accumulated a staggering $202 million since January 2023. Fairshake has been supporting pro-crypto candidates and trying to oust candidates— mostly Democrats— who have pushed back on the crypto agenda. 

…“The crypto industry is spending hundreds of millions of dollars to distract policymakers and the public from its long rap sheet of criminal convictions, predatory conduct, illegal behavior, bankruptcies, lawsuits, and scandals,” said Dennis Kelleher, president of consumer advocacy group Better Markets. “These crypto PACs are looking to make the crypto industry’s work in Congress even easier by trying to defeat elected officials who put the public interest first and are not crypto-lackeys."

The amount of money that has poured into campaign coffers has seemingly convinced Vice President Harris to adopt a more friendly position on cryptocurrencies, as the Democratic Party’s presidential candidate tries to cozy up to the tech and investor industries by having her advisers meet with industry leaders. 

It’s a transition echoed by others on the left. Fourteen current members of Congress, as well as other politicians, recently sent a letter to Jamie Harrison, the Democratic National Committee chair, urging the party to adopt a more pro-crypto platform, and to potentially fire SEC Chair Gensler. The decision to send the letter appears to stem from the crypto industry’s outsized role in elections.

“There is a public perception that the party holds a negative viewpoint on digital assets, largely due to the current SEC’s approach to these transformative technologies,” the group wrote. “We believe this previous hostility does not reflect our party’s progressive, forward-looking, and inclusive values. From an electoral standpoint, crypto and blockchain technologies have an outsized impact in ensuring victories up and down the ballot.”

… In addition to generous campaign donations, crypto companies have also zeroed in on the key agencies overseeing their industry.

For years, the crypto industry has lobbied lawmakers and regulators to allow the Commodity Futures Trading Commission (CFTC) to govern crypto, rather than the comparatively heavily-staffed and well-funded Securities and Exchange Commission. The CFTC has only 725 employees, a budget of $365 million, and has traditionally regulated trades and futures contracts for the agricultural and resource-based markets. 

“The weakness that we have, or the shortcoming, is that we have to rely on folks coming to us and providing tips or complaints,” said CFTC Chair Rostin Benham during a June 13 Senate hearing. “We don’t have those traditional regulatory tools— registration, custody, surveillance, oversight— that have really made American capital and derivatives markets so strong.”

The CFTC has oversight authority of bitcoin because the agency considers it a commodity and, to a lesser degree, the agency oversees certain activity on crypto exchanges. But the bulk of crypto regulation has historically been handled by Gensler’s SEC— a sprawling agency with more than 4,600 employees, and a budget of $2.1 billion. 

The SEC has been aggressive at times in issuing enforcement actions against crypto exchanges and developers who create new cryptocurrencies, with actions dating back to 2012. The agency views cryptocurrencies as a security— a financial product akin to a stock issued by a company— which has much stricter oversight and enforcement than commodities overseen by the CFTC.

In 2023, the SEC issued 46 cryptocurrency-related enforcement actions, more than double the amount the agency issued in 2022, according to Cornerstone Research, a financial analysis and legal firm. Crypto companies have painted Gensler as an enemy of crypto, and Gensler has not shied away from that label.

“It is a field that is rife with abuse and fraud,” Gensler said during a June 13 Senate hearing. “And some of the leaders of this whole field are either in jail, about to go to jail, or awaiting extradition. I mean tens of billions of dollars have been put at risk.”

According to lobbying disclosures, crypto companies, trade associations, and nonprofits associated with crypto have spent nearly $7 million in the first two quarters of 2024 lobbying lawmakers and regulators on a slew of crypto-related issues, including the Financial Innovation and Technology for the 21st Century Act— a bill packed with a number of crypto wish-lists. 

Coinbase alone has spent more than $2.3 million so far this year lobbying lawmakers and regulators on the bill and other issues, disclosures show. 

The Financial Innovation and Technology for the 21st Century Act— or FIT21— would create a new asset class specifically for cryptocurrencies, called “invest contract assets,” which exclude them from the definition of a security, and likely hands oversight from the SEC over to the Commodity Futures Trading Commission, according to an analysis by Better Markets. 

The bill would allow the CFTC to collect registration and annual fees from crypto exchanges, but those fees would be capped at $40 million annually and the ability to collect those fees would expire after four years.

“ This fixed cap is especially problematic given the hundreds of exchanges currently offering bitcoins and the need for the CFTC to hire staff, draft regulations, acquire technology, and enforce the provisions of the bill and the new rules,” Better Markets wrote. 

The bill would also, according to Gelsler, adopt a structure that runs counter to decades of Supreme Court rulings that establish what is and isn’t a security. He’s concerned this could erode long-standing investor protections, and “undermine the broader $100 trillion capital markets.”

“[Crypto exchanges] are choosing to not comply with U.S. law that protects our capital markets,” Gensler said during Senate testimony. “Whether it is stored on an accounting ledger called blockchain or whether it is stored on a notepad, it doesn’t matter.” 

The House of Representatives passed the crypto bill with two-thirds of lawmakers voting in favor. However, experts predict the bill will likely die in the Senate due to the Senate’s slower process of passing bills. 

Currently standing in the way of the bill’s passage in the Senate is Sen. Sherrod Brown (D-OH), chairman of the Senate Committee on Banking, Housing, and Urban Affairs, which oversees the bill’s passage in the Senate. Brown has received an F-rating from Stand with Crypto, and has highlighted how cryptocurrencies have been used for illicit purposes.

Key provisions of the bill could still be attached to must-pass legislation before the year's end. 

Rep. Patrick McHenry (R-NC) has been one of crypto’s most important cheerleaders and is set to retire at the end of the current session. In an interview with CoinDesk, a crypto-focused news outlet, McHenry said that he is looking at “anything, and everything” to attach crypto legislation to before he leaves. 

“We basically have a consensus product out of the House of Representatives that gives us a fighting chance in every legislative product that makes its way to the President's desk,” McHenry said. 

Hays, with Americans for Financial Reform, said the bill offers a “patina of legitimacy” while undermining consumers and that the crypto industry is using the “Washington pay-to-play” rule book to push their agenda.

“The crypto industry has long claimed that it needs regulatory clarity to address crypto regulation for consumers and investors and that the old rules don't work for them,” Hays said. “The problem is that this bill is really more of a cure that's worse than a disease.”