The industry's political awakening — and its massive cash hoard — is already impacting key races across the country.
Ryan Selkis, a cryptocurrency industry executive, was dining at Mar-a-Lago last month when he received an unexpected invitation: Former President Donald J. Trump wanted him to come up on stage and say a few words.
Mr. Selkis, who runs the crypto data company Messari, was one of a few hundred attendees at an event celebrating Mr. Trump’s series of nonfungible tokens , the digital collectibles known as NFTs. When he reached the lectern, Mr. Selkis turned to the former president.
“There are 50 million cryptocurrency holders in the United States,” the executive said. “That’s a lot of voters.” »
The PACs have no plans to get involved in the presidential election, a spokesperson for the groups said. But top cryptocurrency 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 advocates see the 2024 election as a pivotal moment. After a string of cryptocurrency companies went bankrupt two years ago, the Biden administration has launched an aggressive crackdown, filing lawsuits and criminal charges against some of the industry’s most influential figures. The Securities and Exchange Commission (SEC) is pursuing cases that could effectively force the cryptocurrency industry out of the United States.
“The 2024 election is going to be the most consequential election in the history of cryptocurrencies,” said Brad Garlinghouse, the chief executive of Ripple, a cryptocurrency company that has been at loggerheads with the federal government for years. “We’re seeing a technology become a partisan political issue.”
Robert F. Kennedy, Jr., the independent presidential candidate, has attended numerous industry conferences, sometimes hosting fundraising meetings with wealthy executives on the fringe, such as Jack Dorsey, the Block co-founder who has considered donating millions of dollars in crypto to support Mr. Kennedy.Credit..
But voters’ supposed passion for cryptocurrencies may be less important than the industry’s campaign war chest. Ripple, Coinbase and venture capital firm Andreessen Horowitz have each donated about $50 million to crypto PACs, which plan to spend the money on 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 is allied with Sen. Elizabeth Warren, a longtime crypto critic. Porter lost her race.
“A relatively small industry is literally trying to buy enough politicians to hijack the public agenda,” said Dennis Kelleher, president of Better Markets, a financial reform advocacy group. “It’s pretty mind-boggling.”
The industry’s vast resources have turned a set of niche issues into a talking point in the presidential campaign. Robert F. Kennedy Jr., the independent presidential candidate, made his first official campaign appearance at a Bitcoin event in Miami, and he has attended numerous industry conferences, sometimes holding fundraising meetings with wealthy executives on the sidelines.
President Biden has long been seen as an opponent of cryptocurrencies, as his SEC Chairman Gary Gensler has sued numerous crypto companies. But some Biden supporters, including investor Mark Cuban, have pressed his campaign to restore peace.
The campaign has been receptive to the message, Cuban said in an email. In recent weeks, Biden officials have reached out to Coinbase and Ripple, asking to discuss cryptocurrency policy, four people familiar with the discussions said.
Still, much of the industry appears to be rallying around Mr. Trump. While the former president once said that Bitcoin “looks like a scam” and has often criticized the tech industry, he has made several pro-crypto comments in the past month, vowing to end regulatory crackdowns. 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 posted on his social media feed.
The last time the crypto industry spent big on a political race, its top donor was Sam Bankman-Fried, the founder of FTX, who spent tens of millions of dollars supporting both Democrats and Republicans in the 2022 midterm elections. 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 major setback for the cryptocurrency industry’s efforts in Washington. Last year, the SEC sued 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 guidance that crypto companies had challenged. Mr. Biden vetoed the resolution.
Now, the industry is fighting back. Fairshake has announced plans to run in four more Senate races this year, including close races in Ohio and Montana, where Democrats who have criticized cryptocurrency are up for reelection. Privately, cryptocurrency executives have credited Fairshake with appeasing some skeptical lawmakers, including Senator Sherrod Brown, the Ohio Democrat, according to two people familiar with the discussions. Mr. Brown, who is the chairman of the Senate Banking Committee, said in April that he was open to advancing an industry-backed bill.
A few weeks after California’s Senate Adam Schiff primary in March, Representative , the Democrat who defeated Ms. Porter, visited Coinbase’s offices in Mountain View, Calif. He met with representatives from Coinbase, Andreessen Horowitz and crypto-focused investment firms Electric Capital, Paradigm and Haun Ventures, two people familiar with the meeting said.
Mr. Trump has not always been a fan of cryptocurrencies. He has said he prefers dollars to bitcoin, and in 2019 he tweeted that digital currencies were “based on hot air.” But recently, some cryptocurrency industry executives, looking for a political savior, have embraced him.
Vivek Ramaswamy, a crypto enthusiast and former presidential candidate, has claimed credit for Mr. Trump’s pivot to crypto and carved out a role as an emissary to the industry: On Wednesday afternoon, Mr. Ramaswamy met privately with Brian Armstrong, the chief executive of Coinbase, at the Capitol Hill Club in Washington and encouraged him to support the Trump campaign, a person familiar with the meeting said.
Mr. Armstrong has not publicly endorsed a candidate for president. “We will not give special treatment to any particular party,” he said in a statement. “Cryptocurrency is a truly bipartisan issue.”
Mr. Selkis, who identifies as a libertarian, attended the Mar-a-Lago event in May after getting a ticket from a colleague who couldn’t make it. “I was eating my salad and the president called me up on stage,” Mr. Selkis recalled in an interview.
That night, Mr. Trump said, “If you’re in favor of cryptocurrency, you better vote for Trump.” » He also announced that his campaign would accept donations in digital currency and pledged to commute the life sentence of Ross Ulbricht, a cult hero of the cryptocurrency world who ran the online drug marketplace Silk Road.
On Tuesday night, Mr. Trump met with about 15 Bitcoin mining executives for more than an hour at Mar-a-Lago, according to one of the attendees, Salman Khan, chief financial officer of Marathon Digital.
At one point, Mr. Khan said, the executives showed Mr. Trump the inside of a machine used for mining Bitcoin, an energy-intensive process that has raised environmental concerns. “He liked the ‘made in America’ aspect of it,” Mr. Khan said.
Not everyone in the cryptocurrency world agrees with Mr. Trump. At a conference in May, Marvin Ammori, a Democrat who works for the cryptocurrency company Uniswap, debated Mr. Selkis onstage about the industry’s political strategy, warning that Mr. Trump might not deliver on his campaign promises.
This month, Mr. Trump attended a fundraiser at the San Francisco home of David Sacks, a prominent venture capitalist, and reiterated his support for cryptocurrency, according to three people who were there. Guests included Mr. Selkis, cryptocurrency executives Tyler and Cameron Winklevoss and Paul Grewal, the chief legal officer of Coinbase, the people said.