Bitcoin
Cryptocurrency lobbyists are polluting the US elections
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It’s not particularly fashionable to point out when Donald Trump gets something right (whether accidentally or not). But for the record, in 2021 he was right about crypto. Having two years earlier pointed out that cryptography is “not money”” and that its value is “based on air,” said former bitcoin president “it just seems like a scam”, suggested that cryptocurrency was “a disaster waiting to happen”, and said that “the world’s bitcoins” should be regulated “very, very high” [sic].
This was less than a year before the cryptocurrency world spectacularly imploded. From May 2022 onwards, a series of exchanges, tokens and other cryptocurrency projects collapsed in quick succession, wiping out tens of billions of dollars in supposed “value” overnight. Cryptocurrency prices and the “NFTs” market — a type of digital token that is just as useless as any other but pretends to be otherwise — foundered. Regulators weren’t just failing to regulate crypto “very, very highly”; they were asleep at the wheel. In December of that year, crypto’s most notorious criminal, the man known as SBF, was arrested on fraud and conspiracy charges, for which he would later receive a 25-year prison sentence.
But Trump, unfortunately, is no longer right about crypto. As the market recovered, he suddenly went from “not a fan” to seeming positively passionate.
He promised last month to stop Joe Biden’s crusade to crush crypto and said he would support the right to self-custody — technical language that sounds very different from something Trump would have created on his own. “To the 50 million crypto holders in the country, I say this,” he told a crowd at a libertarian convention. “I will keep [Democratic senator] Elizabeth Warren and her henchmen away from your bitcoin.”
It seemed suspicious that Trump was having something deep and significant with the crypto industry. In fact, a few weeks ago he hosted a group of bitcoin miners and industry executives at his private club/permanent residence in Mar-a-Lago. One of those present was the CEO of BTC Inc told CNBC that “as an industry, we are committed to raising over $100 million and turning out over 5,000,000 voters for Trump’s re-election effort.” You can see why Trump might have found their arguments so persuasive.
There is not even any kind of attempt to hide the purchase of influence; quite the opposite, in fact. On Tuesday, sitting New York Congressman Jamaal Bowman has been defeated in the most expensive primary election in the history of the Democratic party. A vocal critic of Israel, which lost to a pro-Israel rival, he has also voted against pro-crypto bills. Afterward, Tyler Winklevoss — who, along with his twin brother Cameron, runs cryptocurrency exchange Gemini — boasted to X: “Politicians everywhere need to understand that this is what happens when you pick a fight with the cryptocurrency army. ”
Last week, the Winklevoss twins donated $1 million each to the Trump campaign (some of which was refunded for exceeding maximum individual contribution rules). calling him the “pro-crypto” choice. They also donated $4.9 million to a pro-crypto super Pac — an independent fundraising committee that can receive unlimited funds from individuals, corporations, and other groups — called “Fairshake.” It has already raised over US$177 millionsecond only to the “Make America Great Again” super Pac, with just over US$ 178 million.
Fairshake was a major contributor to Tuesday’s New York primary, spending more than $2 million on ads targeting Bowman. Along with the Winklevii, several other cryptocurrency billionaires and their companies have contributed large sums to Fairshake, including cryptocurrency company Ripple, which donated a good $45 million; cryptocurrency exchange Coinbase, with just over $45 million; and “techno-optimistic” Marc Andreessen and business partner Ben Horowitz, who between them and their company donated almost US$70 million.
According to data compiled by AdImpact, Fairshake and its affiliated pro-crypto super Pacs, “Defend American Jobs” and “Protect Progress,” have already spent more than $37 million on primary ads. Many of the crypto-friendly candidates they support won their respective House and Senate races.
We should be very concerned about the influence and scale of this rapidly growing crypto lobby. On top of that, lobbyists do not represent the interests of America’s crypto holders. Regulators are not going after retail investors, but rather crypto companies whose founders have made billions by extracting profits from these retail investors.
Their loyalty to politicians appears equally uneven. And the idea that a group of bitcoin executives can provide Trump with 5 million voters is a hoax that even he should be able to see through.