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How cryptocurrency is poised to influence elections
Ryan Selkis, a cryptocurrency executive, was dining at Mar-a-Lago last month when he received an unexpected invitation: Former President Donald J. Trump wanted him to come on stage and say a few words.
Mr. Selkis, who runs the crypto data company Messari, was one of several hundred attendees at an event celebrating Mr. Trump’s victory. non-fungible token series, the digital collectibles known as NFTs. When he reached the lectern, Mr. Selkis turned to the former president.
“There are 50 million crypto holders in the United States,” the executive says. declared. “That’s a lot of voters.”
This message has become a political talking point in the crypto world, as the industry attempts to shake off a wave of scandals and establish itself as a powerful force in the 2024 election cycle. Three big companies cryptography have came together to finance a group of affiliated super PACs, investing approximately $150 million to elect pro-crypto candidates in congressional races.
The PACs do not plan to participate in the presidential election, a spokesperson for the groups said. But top crypto executives have tried to rally the industry behind Mr. Trump, who has reciprocated by praising digital currencies and hosting executives at Mar-a-Lago.
Many crypto proponents view the 2024 election as a pivotal moment. After the collapse of a series of crypto companies two years ago, the Biden administration embarked on a aggressive repression, filing lawsuits and criminal charges against some of the industry’s leading figures. The Securities and Exchange Commission is continuation of cases this could effectively force the crypto industry out of the United States.
“The 2024 election will be the most important in crypto history,” said Brad Garlinghouse, chief executive of Ripple, a crypto company that has been battling with the federal government for years. “You see a technology becoming a partisan political issue. »
Mr. Garlinghouse, Mr. Selkis and other leaders have argued that newly energized “crypto voters” could influence the outcome of the election. They often cite a investigationcommissioned by crypto exchange Coinbase, which suggests that 52 million Americans own digital currencies. (The Federal Reserve estimates that the total represents 7 percent of the adult population, or about 18 million people.)
But voters’ supposed passion for crypto may be less important than the industry’s war chest. Ripple, Coinbase and venture capital firm Andreessen Horowitz have each donated around $50 million to crypto PACs, which plan to spend the funds in several competitive Senate races. In March, the largest PAC, Fairshake, spent about $10 million on attack ads against Rep. Katie Porter, a Democratic candidate in the California Senate primary who was allied with Sen. Elizabeth Warren, a critic of longstanding in cryptography. Ms. Porter lost her race.
“A single, relatively small industry is literally trying to buy off enough politicians to hijack the public agenda,” said Dennis Kelleher, president of Better Markets, a financial reform advocacy group. “It’s pretty mind-blowing.”
The vast resources available to the industry have made a specific set of issues a topic of discussion during the presidential campaign. Robert F. Kennedy Jr., the independent presidential candidate, do his first official campaign appearance at a Bitcoin event in Miami, and he attended several industry conferences, sometimes holding fundraising meetings with wealthy executives on the sidelines.
President Biden has long been seen as anti-crypto because his SEC Chairman Gary Gensler has sued many crypto companies. But some Biden supporters, including investor Mark Cuban, insisted his campaign would mend fences.
The campaign was receptive to the message, Mr. Cuban said in an email. In recent weeks, Biden officials have contacted Coinbase and Ripple, asking to discuss crypto policy, four people familiar with those discussions said.
Yet much of the industry appears to be rallying around Mr. Trump. While the former president said once Bitcoin “looks like a scam” and has often criticized the tech industry, he has made several favorable comments on crypto over the past month, promising to end the regulatory crackdown. On Tuesday, Mr. Trump met at Mar-a-Lago with executives from some of the world’s largest Bitcoin mining companies, including Marathon Digital and Riot Platforms.
Bitcoin should be “MADE IN THE USA!!!” ” he job on his social network.
The last time the crypto industry spent significant sums in a political race, its biggest donor was Sam Bankman-Fried, the founder of FTX, who spent tens of millions of dollars supporting both Democrats and the Republicans in the 2022 midterms. Two years later, Mr. Bankman-Fried’s company is bankrupt and he is serving a 25-year prison sentence for fraud.
The collapse of FTX was a huge setback for the crypto industry’s efforts in Washington. Last year, the SEC for follow-up Coinbase and other crypto companies, arguing that the digital assets they allowed customers to buy and sell were unregistered securities. In May, the industry scored a rare legislative victory when Congress voted to overturn an SEC accounting directive challenged by crypto companies. Mr. Biden vetoed The resolution.
Now the industry is fighting back. Fairshake has announced plans enter four more Senate races this year, including close contests in Ohio and Montana, where Democrats who have criticized crypto are up for re-election. Privately, crypto executives have credited Fairshake with softening up some skeptical lawmakers, including Sen. Sherrod Brown, Democrat of Ohio, according to two people familiar with the conversations. Mr. Brown, who chairs the Senate Banking Committee, said in April he was willing to propose an industry-backed bill.
A few weeks after the California Senate primary in March, Representative Adam Schiff, the Democrat who defeated Ms. Porter, visited Coinbase’s offices in Mountain View, California. He met with representatives from Coinbase, Andreessen Horowitz and crypto-focused investment firm Electric Capital. , Paradigm and Haun Ventures, two people familiar with the meeting said.
Mr. Trump has not always been a supporter of crypto. He said he preferred dollars to Bitcoin, and in 2019 he tweeted that digital currencies were “based on wind”. But lately, some crypto executives – looking for a political savior – have embraced it.
Vivek Ramaswamy, crypto enthusiast and former presidential candidate, has credit claimed for Mr. Trump’s pivot to crypto and has carved out a role as an emissary to the industry: On Wednesday afternoon, Mr. Ramaswamy met privately with Brian Armstrong, chief executive of Coinbase, at the Capitol Hill Club in Washington and encouraged him to support Trump. campaign, a person familiar with the meeting said.
Mr. Armstrong has not publicly endorsed a presidential candidate. “We will not give special treatment to any particular party,” he said in a statement. “Crypto is a truly bipartisan issue.”
Mr. Selkis, who identifies as a libertarian, attended the Mar-a-Lago event in May after get a ticket from a colleague who could not come. “I’m eating my salad and the president cold calls me on stage,” Mr. Selkis recalled in an interview.
That night, Mr. Trump declared, “If you are in favor of crypto, you better vote for Trump.” He also has announcement that his campaign would accept digital currency donations and pledged to shuttle the life sentence of Ross Ulbricht, a cult hero in the crypto world who ran the online drug market Silk Road.
On Tuesday evening, Mr. Trump met with about 15 Bitcoin mining executives for more than an hour at Mar-a-Lago, according to one of the participants, Salman Khan, chief financial officer of Marathon Digital.
At one point, Mr. Khan said, the executives showed Mr. Trump inside a machine used for mining Bitcoin, an energy-intensive process which has raised environmental concerns. “He loved the made-in-America functionality,” Mr. Khan said.
Not everyone in the crypto world agrees with Mr. Trump. At a conference in May, Marvin Ammori, a Democrat who works for the crypto company Uniswap, debated Mr. Selkis took the stage about the industry’s political strategy, warning that Mr. Trump may fail to deliver on his campaign promises.
Yet this month, Mr. Trump attended a fundraiser at the home of David Sacks, a prominent venture capitalist, in San Francisco, and reiterated his support for crypto, according to three people present. Guests included Mr. Selkis, crypto executives Tyler and Cameron Winklevoss and Paul Grewal, Coinbase’s chief legal officer, the sources said.
“The crypto vote has already been won by President Trump,” Mr. Selkis said. “It’s finish.”
Shane Goldmacher contributed reporting.