The cryptocurrency industry has a greater influence on U.S. politics than ever before. But behind the scenes, left and right are divided over who they support to become president and control Congress next year.
Democratic cryptocurrency lobbyists, executives and investors say the industry risks moving too far to the right as industry leaders rush to support Republican presidential candidate Trump, who has promised to enact policies to boost digital asset companies.
Their Republican counterparts say reaching out to Democratic nominee Harris Harris and endorsing her party's junior candidates could isolate longtime Republican allies with little hope of success. The Biden administration is skeptical of cryptocurrency trading, and it's unclear how Harris will proceed.
Super PACs donate heavily
The internal dispute comes to light as the crypto industry's nearly $170 million super political action committee (PAC) begins pouring money into key races across the country and as some cryptocurrency advocates seek to gain access to Harris.
After the crypto super PAC Fairshake announced that it would spend millions of dollars to oust Ohio Senator Sherrod Brown, Democratic megadonor Ron Conway said he would cut ties with Fairshake.
When Fairshake decided to endorse Rep. Ruben Gallego, D-Ariz., and Elissa Slotkin, D-Mich., in their Senate races in battleground states, the Montana Republican Party included Republican lawmakers, including Congressman Steve Daines, expressed their displeasure to cryptocurrency executives.
Kristin Smith, CEO of the Blockchain Association, said:
"There's a lot of excitement right now. There's industry strategy, there's personal strategy -- and sometimes those strategies may not be completely aligned."
Nearly a dozen cryptocurrency advocates familiar with the conflict said in interviews that the escalating tensions pose new hurdles for the industry as it tries to push for regulatory reform in Congress amid an election-year political environment and With limited speaking time, this reform is already in the distant future.
"Ever since the Ohio super PAC was announced, it's been a mess," one congressional aide said candidly, speaking on condition of anonymity. "Democrats are crazy, Republicans are crazy, everyone is crazy."
Crypto industry push creates huge divide between parties
It's not unusual for election year dynamics to stymie bipartisan momentum, but it's noteworthy that there are such deep divisions within an industry on how to move forward. Even defunct cryptocurrency giant FTX contributed huge sums to both parties.
“There are roughly equal numbers of Republicans and Democrats and independents. It’s just a unique industry and it’s causing conflict,” said one crypto lobbyist who spoke on condition of anonymity.
Cryptocurrency’s largest political campaign funders have become increasingly outspoken about their personal views.
Andreessen Horowitz co-founder Marc Andreessen, whose venture capital firm is a major backer of cryptocurrencies, recently declared Trump "the right choice" for the "future of our business." Cameron Winklevoss and Tyler Winklevoss, co-founders of digital asset company Gemini, said they will each donate $1 million to Trump.
“The vitriolic criticism coming from the center-right, from very high-profile CEOs and investors, has caused a lot of panic on the left,” said cryptocurrency entrepreneur Jonathan Padilla, who helped launch Crypto4Harris, which supports Democratic candidate Harris, in hopes of becoming a vice president. The president drummed up support.
Tensions are spreading to Capitol Hill, potentially jeopardizing bipartisan support for legislation enacting cryptocurrency-friendly regulations this year, an issue that has grown since 71 Democratic House members helped 208 Republican lawmakers pass a cryptocurrency reform bill in May. Adding more partisan color.
Weeks before becoming Trump's running mate, Ohio Senator J.D. Vance began promoting a cryptocurrency regulation proposal that is unlikely to gain support from all parties. Senate Agriculture Committee Chairman Debbie Stabenow (D-Mich.) canceled the committee’s vote on his cryptocurrency bill after failing to secure Republican support.
Some cryptocurrency proponents are now raising the idea that the industry should cautiously push for votes until Trump is elected and Republicans gain seats in the Senate.
While top Democrats such as Majority Leader Chuck Schumer have been open about concerns about the crypto industry, they believe Republicans would be more reliable allies.
One crypto lobbyist who spoke on condition of anonymity to discuss the idea said: “If you think Trump is going to win the election, and especially if you think the Senate is likely to be controlled by Republicans, why would you negotiate with your own people? "
Democratic cryptocurrency lobbyists and lawmakers warn that all-out support for Republicans is shortsighted. They are trying to make progress with Harris' campaign and still hope she can pursue more supportive policies than Biden, whose regulators have been in a tit-for-tat situation with digital asset companies.
Sheila Warren, CEO of the Cryptocurrency Innovation Council said,
“Cryptocurrency advocates who engage with Harris have no intention of putting all their eggs in one basket or in one political party... I think it’s seen as brave, or pointless, and it’s a sad state of affairs, but it’s That’s our current situation.”
Concerns about a breakdown in left-wing relations grew after the cryptocurrency super PAC announced plans to spend $12 million to support Brown's Republican opponent Bernie Moreno in the U.S. Senate race in Ohio.
If Brown is re-elected, he will likely serve as chairman of the Senate Banking Committee next year and have a significant say in the future of cryptocurrency regulation, so this move is a risky bet.
"Anyone who cares about the future of cryptocurrency should want this issue to remain a bipartisan discussion," said Rep. Wiley Nickel, D-N.C., who is trying to connect Harris' campaign with cryptocurrency industry players. . "Anything less than that will poison cryptocurrencies for the next decade."
Pro-crypto Republicans say it's naive to hold out hope for Democrats. The party is the camp of some of the industry’s biggest opponents, including U.S. Securities and Exchange Commission Chairman Gary Gensler and Massachusetts Senator Elizabeth Warren, who have warned that cryptocurrency trading poses dangers to consumers and the financial system. Harris does not have a clear record on this issue.
“I’m very concerned that many candidates are changing their stance on this issue for political gain,” said Sen. Cynthia Lummis, R-Wyo., a prominent cryptocurrency supporter. She said she was “very skeptical of Harris’ alleged change of stance.” ”.
Fairshake has poured money into Republicans and Democrats in an effort to win over allies and quell criticism. But that doesn't mean either party is happy, with the group saying it has spent about $75 million of the $169 million it raised and declining to comment for this story.
Some Democratic donors, including tech billionaire Conway, have warned that the group's spending is a broader effort to win a Republican majority in Congress.
Likewise, Republicans are unhappy with the super PAC's support of Democrats, which some see as a years-long betrayal. One of them is Daines, the Montana congressman who led the Republicans in taking back the Senate.
“You piss off the people who are pushing the industry because this party (Republicans) is skeptical at best,” said one Republican strategist, who spoke on condition of anonymity to discuss the matter privately. “There have been conversations like this among Republican lawmakers. , do you think twice before meeting people in the cryptocurrency industry?”
