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Wealthy Industry Donors Fuel Trump’s Conversion to Cryptocurrency
Donald Trump called cryptocurrency “a scam” and a “disaster waiting to happen” during his time in office.
In the official Republican Party program, curated by Trump last week, the tone was different.
“Republicans will end Democrats’ illegal and anti-American crackdown on cryptocurrencies and oppose the creation of a central bank digital currency,” read the platformwhich will be formally adopted Monday at the Republican National Convention in Milwaukee. “We will defend the right to mine Bitcoin and ensure every American has the right to self-custody of their digital assets and transact free from government surveillance and control.”
The about-face comes after an aggressive campaign by wealthy cryptocurrency executives who have lavishly funded Trump’s campaign with donations, spent money on events at Mar-a-Lago, promised to hold fundraisers for his 2024 campaign and pressured him with harsh criticism of President Biden and his administration, according to eight people familiar with the matter, who spoke on condition of anonymity to describe private conversations and fundraisers.
As he sought to secure big checks from some of the country’s wealthiest Republicans, Trump frequently promised donors at fundraisers that he would enact policies they would like, from cutting corporate taxes to approving their oil permits throw pro-palestinian demonstrators abroad.
In recent months, Trump advisers say the former president has held numerous meetings about cryptocurrency with donors and potential donors. His interest in cryptocurrency, a digital currency not tied to any central bank, was piqued when a group of donors came to Mar-a-Lago to say they would support his campaign and complained about Biden administration officials, including SEC Chairman Gary Gensler.
Trump recently attended another large fundraising event in California, which featured cryptocurrency industry executives, according to people in attendance. Trump vowed to support their “innovation,” according to one attendee.
Trump and his campaign have met repeatedly with David Bailey, a cryptocurrency entrepreneur who has promised to host a $15 million fundraiser for Trump in Nashville by the end of the month, according to people familiar with the matter. Trump is also expected to headline a cryptocurrency conference, where he has been won over by the idea of a large crowd and celebrity.
According to people familiar with the meeting, one of the private meetings between Bailey and Trump took place at Trump Tower in New York last spring, during the former president’s criminal trial for corporate fraud.
His campaign announced it would accept cryptocurrency donations a few days after that meeting. Crypto executives and supporters also held several events at his Florida club, according to people who attended.
Bailey also pitched Trump senior adviser Vince Haley on cryptocurrency ideas at a dinner last month, sources said, at the same meeting where he pitched the Tennessee fundraiser.
Haley then drafted the platform that had supportive language about cryptocurrency, the people said. It was a topic the party had never touched on before and surprised some longtime party members, who wondered where the language came from. It passed overwhelmingly in Milwaukee last week and has received little attention.
A Trump spokesperson declined to answer questions about donors supporting Trump’s push and his cryptocurrency pushback.
“Cryptocurrency innovators and others in the tech sector are under attack from Biden and Democrats,” Trump campaign spokesman Brian Hughes said. “As Biden stifles innovation with more regulation and higher taxes, President Trump stands ready to encourage American leadership in this and other emerging technologies.”
Advisers said Trump knew very little about cryptocurrencies until donors approached him, and had long harbored negative feelings about them, viewing them as counterfeit money.
“I am not a fan of Bitcoin and other cryptocurrencies, which are not money and whose value is highly volatile and based on nothing,” he wrote on Twitter in 2019. “Unregulated cryptocurrencies can facilitate illicit behavior, including drug trafficking and other illegal activities.”
A top adviser to Trump’s 2020 campaign said there was never any talk of focusing on cryptocurrencies in the campaign or including them in the party’s official platform because Trump was so against it.
“He thought it was … strange and didn’t want anything to do with it,” the official said. “He had no idea what it was and wasn’t interested in finding out.”
A second adviser who spent hundreds of hours with Trump said, “I’ve only talked to him about it once or twice, and he’s never blew my mind.”
Two donors described speaking privately with Trump when he promised to be helpful on the issue, but did not appear to know the details of cryptocurrency. Trump’s thinking, according to people who spoke to him, is that there are cryptocurrency supporters who can help him win back the presidency, and there are potential donors to his campaign who like the currency and want to use it.
“Trump understands that the Biden administration has mishandled cryptocurrency policy and misjudged its importance,” said Trump donor and crypto executive Kyle Samani, who attended the fundraiser in California. “A lot of cryptocurrency supporters are single-issue voters, have money, and are looking for a candidate to support. He and his team recognize all of that and are capitalizing on it.”
Samani, Bailey and other donors said the industry was frustrated with the Biden administration’s regulatory actions. Others in the industry, including some who dislike Trump, said Gensler had been too aggressive and that they needed to craft sensible regulations for a largely unregulated industry.
According to the agency’s website, the SEC has filed more than 80 cases against cryptocurrency industry figures during the Biden administration. The allegations have often included defrauding customers, misrepresenting assets, or conducting unregistered cryptocurrency offerings.
“The SEC’s Office of Investor Education and Advocacy continues to urge investors to be cautious when considering an investment involving cryptocurrency securities,” the agency warns on its website. “Investments in cryptocurrency securities can be exceptionally volatile and speculative, and the platforms where investors buy, sell, borrow, or lend these securities may lack important investor protections.”
A Gensler spokeswoman declined to comment on the administration’s regulatory actions. A Biden campaign spokesman, Ammar Moussa, declined to comment. Senior White House officials have met with cryptocurrency executives in recent days, where they’ve heard a series of complaints.
Tim O’Brien, Trump’s longtime biographer, said Trump’s adoption of cryptocurrencies is not a surprise.
“Anyone who has ever walked into Trump’s office and offered him an easy way to make money has gotten his attention. They’ve gone to the races,” O’Brien said. “He’s always been an opportunist when it comes to politics.”
The industry has jumped at the chance to shape Trump’s thinking. Cryptocurrency executives have flooded Washington with contributions in recent years, according to OpenSecrets, a group that tracks campaign contributions. The industry is responsible for about $121 million in contributions so far this election cycle, according to the group.
More contributions went to Republicans than Democrats this cycle, according to an analysis provided by the group. It’s the first time Republicans have benefited financially from industry donations, the group’s data shows.
Earlier this year in the hills of San Francisco, several cryptocurrency executives attended a fundraiser at the home of donor David Sacks, according to an attendee sheet reviewed by The Washington Post. Cameron Winklevoss and his twin brother Tyler, famous cryptocurrency investors, both topped Trump’s campaign donations, a campaign official said.
Numerous questions about cryptocurrency were asked at the fundraiser, and Trump gave supportive, if not substantive, answers, attendees said. He also expressed support for cryptocurrency in his prepared opening remarks.
“It was probably 20 percent of the fundraiser,” one attendee said.
Donors were pleased with their access to Trump’s inner circle.
“We’re really excited about what the Trump campaign has done publicly. We’re excited to see what they do next,” Bailey said.
Greg Xethalis, a lawyer for cryptocurrency firm Multicoin Capital, said he was pleased the party’s platform included such supportive language. Xethalis said he never expected his firm to be so politically involved.
“It’s pretty strong and good language. It sets the right broad policy goals and can be followed up with good, coherent legislative and regulatory frameworks,” Xethalis said. “Cryptocurrency has become more of a political issue than we necessarily thought it would be… The Republican Party saw an opportunity here.”
Ashley Parker and Yvonne Wingett-Sanchez contributed to this report.