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Big stories about money and politics in the race for the White House
It’s not particularly fashionable to point out when Donald Trump has done something right (whether intentionally or not). But the fact is that in 2021, he was right about crypto. There were two years before that that showed Cryptocurrency “is not money” and its value is “based on nothing,” former president says bitcoin “seems like a scam”, the proposed cryptocurrency is “a disaster waiting to happen”, and said “the world’s bitcoins” should be regulated “very, very high” [sic].
Less than a year ago, the crypto world came crashing down in spectacular fashion. Since May 2022, a series of exchanges, tokens, and other crypto projects have collapsed one after another, wiping out tens of billions of dollars in supposed “value” overnight. Cryptocurrency prices and the “NFT” market — a type of digital token that can only be as worthless as anything else but pretended otherwise — failed. Regulators not only failed to regulate cryptocurrencies at a “very, very high” level; they were asleep at the wheel. In December of that year, the crypto world’s most notorious criminal, the man known as SBF, was arrested on fraud and conspiracy charges that would later carry a 25-year prison sentence.
But alas, Trump is no longer right about crypto. As the market recovers, he suddenly goes from “not a fan” to seemingly very enthusiastic.
He swore last month to stop Joe Biden’s crusade to crush cryptocurrencies and say he would support self-regulation — technical language that sounds very different from what Trump himself has come up with. “I want to say this to the nation’s 50 million crypto holders,” he told a crowd at a libertarian conference. “I will keep [Democratic senator] Elizabeth Warren and her ilk stay away from your bitcoin.”
It sounds suspiciously like Trump has some deep and meaningful involvement with the cryptocurrency industry. Indeed, a few weeks ago, he hosted a group of bitcoin miners and industry executives at his private members club/permanent residence, Mar-a-Lago. One of those present, the CEO of BTC Inc, told CNBC that “as an industry, we are committed to raising over $100 million and engaging over 5,000,000 voters in support of Trump’s re-election effort.” You can see why Trump might find their argument persuasive.
There wasn’t even any attempt to hide the buying of influence; Quite the opposite, in fact. On Tuesday, incumbent New York congressman Jamaal Bowman has been defeated in the most expensive primary election in Democratic Party history. A vocal critic of Israel who lost to a pro-Israel opponent, he also voted against pro-cryptocurrency bills. Then, Tyler Winklevoss — who with his twin brother Cameron runs the Gemini cryptocurrency exchange — mocked X: “Politicians everywhere need to understand that this is what happens when you cause trouble.” war on the crypto army.”
Last week, the Winklevoss twins each donated $1 million to Trump’s campaign (some of which was refunded because it exceeded the maximum individual contribution limit), call him “pro-crypto” choice. They also donated $4.9 million to a crypto super Pac — an independent fundraising committee that can accept unlimited amounts of money from individuals, companies, and other groups — called “Fairshake.” This has increased more than 177 million USDsecond only to the super Pac “Make America Great Again”, with just over 178 million USD.
Fairshake was one of the major contributors to Tuesday’s New York primary, spending more than $2 million on ads targeting Bowman. Along with Winklevii, several other crypto billionaires and their companies contributed large sums of money to Fairshake, including crypto firm Ripple, which donated 45 million dollars clean; cryptocurrency exchange Coinbase, with just over 45 million USD; And “technology optimist” Marc Andreessen and business partner Ben Horowitz, who between them and their businesses have donated nearly 70 million dollars.
According to data compiled by AdImpact, Fairshake and its affiliated pro-crypto super PACs, Defend American Jobs and Protect Progress, spent more than $37 million on advertising during the primaries. Many of the crypto-friendly candidates they supported went on to win races for the House and Senate.
We are deeply concerned about the influence and scale of this rapidly growing crypto lobby. Lobbyists do not represent the interests of crypto holders in the US, more than anything else. Regulators are not going after retail investors, they are going after crypto companies whose founders have made billions of dollars by exploiting those retail investors.
Their loyalty to politicians also appears to be uneven. And the idea that a group of bitcoin executives could give Trump 5 million voters is a farce that even he should be able to see through.
