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Crypto Industry Influence on US Elections Greater Than Ever, Industry Experts Say
The crypto industry is pulling its weight in Washington in hopes of influencing the upcoming US elections, spending an unprecedented amount of money to elect crypto-friendly candidates and educate lawmakers — all in hopes of finally establishing a crypto-friendly regulatory framework. cryptography.
Crypto-focused political action committees (PACs) like Fairshake – which has raised around $85 million from a range of crypto companies, executives and retail investors – have successfully shaped the outcome of some significant races, including spending $10 million helping crush the offer from crypto-critical congresswoman Katie Porter (D-California).
Fairshake also invested money in two affiliated PACs: Defend American Jobs, which donates to Republican candidates, and Protect Progress, which donates to Democrats. Both donated to winning campaigns. Over the past two months, Defend American Jobs has spent nearly $500,000 on media buys for Republican Indiana state senator Mark Messmer, who won the Republican nomination for Indiana’s 8th District congressional seat this week.
Some of Protect Progress’s crypto-friendly Democratic candidates, including Shomari Figureswho is running for a House seat in Alabama and Julia Johnson in Texas, they also won the primary with the help of media buying.
“It’s at a level we haven’t seen in previous election cycles,” said Kristin Smith, CEO of crypto lobby group the Blockchain Association.
Industry experts say the industry’s economic power has even spurred some crypto skeptics — including Sen. Sherrod Brown (D-Ohio), chairman of the Senate Banking Committee who is running for re-election this year — to adopt a more open stance. crypto stance so that they do not face well-funded opposition efforts from the industry.
“Previously he was not a friend of cryptography, but recently [Brown] “I think he’s aware of the money from outside industry groups looking for politicians who are open to reasonable solutions, common sense cryptocurrency policies and are not just trying to prop up or support the traditional financial ecosystem without enabling innovation.”
While previous industry efforts to shape election results on a national level have been largely unsuccessful – and in the case of former FTX CEO Sam Bankman-Fried, Criminal – the crypto industry’s growing political influence now appears to have more staying power.
“It’s a much more sophisticated operation,” Smith said. “I feel like I used to walk around Washington and people would say, ‘Oh, there’s Kristin, she works for that little blockchain industry.’ Now it’s like, ‘Wow, this is the powerful crypto industry and they’re here to influence Washington and they’re utilizing every tool to do so.’
While the crypto industry has largely focused its lobbying efforts on the congressional elections, the US presidential elections will also have a significant impact on crypto regulation.
According to at least one small survey commissioned by crypto investment firm Paradigm, crypto-holding voters tend to prefer Donald Trump for president – although, according to other polls, the the percentage of voters who own crypto is smallI. Polimercado bettors at the moment give Trump a slight edge to win (47% vs. 44% for Biden). But industry insiders are less sure whether a Trump presidency would actually be better for crypto.
Although Trump’s crypto stance is changing, it is still noticeably less pro-crypto than that of his former competitor for the Republican presidential nomination, Vivek Ramaswamy, who promised to protect crypto developers and create a clear regulatory framework for crypto that would consider most tokens as commodities.
“Trump trusts Vivek on technology and digital asset policy,” said Lee Bratcher, founder and president of the Texas Blockchain Council. “He didn’t always do this, but when he saw how Vivek won over the Republican – and more centrist – electorate [voters] than Trump can capture – he’s probably more interested in that [policy].”
Industry insiders were divided on whether Biden’s re-election would be bad for the crypto industry.
Smith said it would probably be “more of the same unless [Securities and Exchange Commission Chair] Gary Gensler decides to step aside,” which means continued regulatory uncertainty and aggressive enforcement actions. A better, more open-minded SEC chairman, she added, would be “extremely helpful.”
“It’s unfortunate because at the beginning of the Biden administration there was some interest in crypto – and then the industry imploded while they were doing all their reporting and as a result they are in a clearly negative situation now,” Smith said. . “About [Biden’s] note, the industry has had some not-so-good times and it’s understandable why regulators are concerned.”
Smith said that while the crypto industry has largely moved past the crypto meltdown of 2022 – including the implosions of FTX, Terra/LUNA and Three Arrows Capital – regulators have much older memories.
“Having a new group of regulators come in would be helpful in restarting conversations,” Smith said.
Others, like Bligen, seemed more hopeful that crypto-friendly legislation would be passed after the election if Biden remains in power.
“I cannot say that if President Biden is re-elected it will be a loss for cryptocurrency advocates, because currently in this regime Democrats and Republicans are working together on a bipartisan basis to produce productive and responsible cryptocurrencies [legislation]” said Bligen.
There are ongoing efforts in the current Congress to pass cryptocurrency legislation, including a bipartisan effort to regulate stablecoins.
These legislative efforts – which have, in the past, failed to find ground – still have significant hurdles to overcome before they can be approved, including getting more members of Congress on board with encryption.
Bligen said there are still many members of Congress who don’t know much about crypto, and the things they do know about it “come from flashy headlines about cryptocurrency scams, people misrepresenting currencies, people being defrauded of their money, massive crypto institutions fail. – they see it from a protectionist angle,” he said.
“If you want to have more crypto-friendly people, every office needs to have a basic understanding of what cryptocurrency is, why it matters to my constituents, and what the political landscape is that regulates it. I know that,” Bligen said. “If you don’t have this basic information, you’re going to have members fumbling around, trying to understand what blockchain technology is… there needs to be more coordinated educational efforts. Let’s not just get to a more polite level. 2025, the work has to be done.”
Bratcher added that in addition to educational efforts, the industry may have to compromise on certain issues – such as privacy – to make real progress with lawmakers.
“We are at an interesting crossroads when it comes to privacy,” Bratcher said, referring to the ongoing crackdown on bitcoin mixing services such as Tornado Cash and Samourai Wallet.
“People in the digital asset industry want to prioritize privacy above all else. When we work with government – state, local and national, and even law enforcement – we don’t have the luxury of being able to make grandiose claims about this, Bratcher added: “There’s going to have to be a balance between privacy and whitewashing issues. of money and national security.”
“Tornado Cash is not a hill I’m willing to die on,” Bratcher said. “We could lose a war if we decide to die on Tornado Cash Hill.”
While the spotlight is on national elections, Bratcher and others — like Dennis Porter, CEO and co-founder of bitcoin mining advocacy group Satoshi Action Fund — are focusing their efforts on state politics.
Porter’s group helped introduce bills in 16 US states that provide protections for bitcoin mining and self-custody. The most advanced bill is in Oklahoma, where it has passed the state House and Senate and awaits Governor Kevin Stitt’s (R) signature.
“DC is fun and sexy. A lot of money is spent there, but so far we haven’t seen any big wins – all the important battles are happening at the state level,” Porter said.
Porter said the industry should continue to build its presence in D.C., but said it won’t find the magic cure for all its ills on Capitol Hill.
“The way we’re going to do this is at the state level,” Porter said. “We will advocate, state by state, for a proactive digital policy, using states as a laboratory for democracy, eventually taking these good ideas and using them to influence policy at the federal level. creating a regulatory regime that protects people at the state level.”
Porter’s model for cryptocurrency regulation takes a page out of the cannabis industry’s playbook — building momentum and support in states until the industry is powerful enough to shape federal regulations.
“We’re going for home runs again and again in D.C., but we’re not strong enough yet,” Porter said. “I think we’re further away from that than we realize… The big story to me is that we need to spend a lot more time at the state level, investing a lot more money, because the hundreds of millions of dollars spent in D.C., if spent at the state level state, would radically reshape the political landscape and radically change the dynamics of bitcoin and digital assets in America.”