Donald Trump was right.
Well, briefly.
In June 2021, the former president gave an interview to Stuart Varney of Fox Business Channel in which he said that Bitcoin – the most popular form of cryptocurrency, as the electronic alternative to traditional money was then gaining traction. value – looked like “a scam to him.”
“The currency of this world should be the dollar,” Trump said. “And I don’t think we should have all the Bitcoins in the world. I think they should regulate them very, very high. At the time, POTUS 45’s comments made it seem like – for the man who had imposed Trump University and Trump Vodka on the world – that the game was recognizing the game.
Trump’s comments seemed prescient about 18 months later, when crypto’s best-known evangelist — Sam Bankman-Fried, founder of cryptocurrency exchange FTX — was arrested and later convicted of fraud, amid growing concerns for “small investors”. Although it probably wasn’t on Trump’s mind that day, other critics have focused on the damage caused by electronic cryptocurrency “mining” – with the industry saying it needs as much ‘electricity than a European country like Greece or the Netherlands, and much of it is yet to come. of the combustion of fossil fuels.
But less than three years after calling crypto a scam, and now in the running to become the 47th president, Trump suddenly wanted in on it. He spoke this summer in Nashville at a Bitcoin conference where he said he would make America “the crypto capital of America.” world,” and promised that if he became president, he would only appoint regulators who “love” the industry. Trump’s comments come as he successfully woos major pro-crypto billionaire donors like Silicon Valley’s Marc Andreessen and Tyler Winklevoss of The social network fame. Indeed, Trump and his sons Donald Jr. and Eric last month unveiled their own crypto venture, called World Liberty Financial, which seemed right in line with other recent bets like $399 sneakers or high-end watches. $100,000 – which can be purchased with cryptocurrency.
So one might expect pro-consumer, pro-environment Democrats and their standard-bearer, Kamala Harris, to counter Trump as a party committed to cracking down on the worst abuses. This is not the case. If anything, Harris – aggressively seeking funding in Silicon Valley to finance a campaign that only launched in July – has sent signals to Big Crypto that she might be kinder and gentler to the industry than the Biden administration. After her aides reportedly contacted crypto industry officials, Harris held a Wall Street fundraiser and told wealthy attendees that as president she would “encourage innovative technologies like AI and digital assets while protecting our consumers and investors.”
What we are witnessing in the 2024 election is the worst nightmare of good-government groups that have warned for decades about the corrupting influence of big money in American politics. The $119 million the crypto industry has invested in US politics this year – so far – is believed to be the largest amount any industry has ever spent in a single cycle. And the nature of this conspiracy is clear: a handful of billionaires and lucrative corporations who owe their wealth to what its harshest critics call “a pyramid scheme” seek to prevent regulations that would protect ordinary citizens.
“It’s pretty unprecedented,” Rick Claypool, a senior researcher for the good-government group Public Citizen, told me. He added that what’s also notable about this tsunami of campaign cash is that industry-backed television ads — which in the primaries helped defeat pro-consumer candidates like California Rep. Katie Porter and New York Rep. Jamaal Bowman, candidates for U.S. Senate — attacking the candidates without even mentioning crypto. “It’s pretty much the standard message from focus groups,” he said, “that this politician can’t be trusted.”
The reason the crypto industry — including major donations from companies like Coinbase and Ripple Labs, made possible by the controversial 2010 U.S. Supreme Court ruling Citizens United v. FEC decision – doesn’t talk about cryptocurrency in its ads, it’s probably because the overwhelming majority of American voters don’t care. Research shows that only about 7% of Americans invest in crypto, although its popularity appears to be greater among young men targeted by Trump.
So the rise in crypto donations looks like the classic example of an issue that could mean millions of dollars for an extremely small class of wealthy donors, but means almost nothing to average voters. Cynically, the ability to attract large donations without losing votes is catnip for Republicans like Trump — who also promised the owners of big oil companies that he would deregulate their industry for $1 billion in donations — but also for Democrats like Senate Majority Leader Chuck Schumer, who told Crypto4Harris. town hall and fundraiser in August that “crypto is here to stay!” » The $30 million crypto spent to help Ohio Republican Bernie Moreno unseat populist Democratic Sen. Sherrod Brown could flip the Senate, with consequences for everything from abortion rights to the next judge of the Supreme Court.
Crypto may be here to stay, but the need for aggressive regulation seems clear. Even though crypto proponents are not wrong in saying that the rise of Bitcoin and other currencies has exposed the inefficiencies of traditional banking, the risks still seem to outweigh the stated benefits. These include the ongoing risks of fraud like that which took place with FTX, the risk that unsophisticated small investors will be harmed by the huge price swings in crypto’s value, the fact that crypto appears popular with criminals and bribes, and its insane levels of pollution.
These are some of the main reasons why top Biden administration officials, including Securities and Exchange Commission Chairman Gary Gensler and Federal Trade Commission Chair Lina Khan, have regulated crypto more aggressively, especially since the Bankman-Fried scandal. Nearly $120 million later, crypto billionaires have already won as both sides promise to bring relief to their industry.
Like the brilliant new podcast Master plan reveals that this disturbing state of affairs has been brewing for over 50 years, ever since the captains of capitalism saw the creation of corporations as people with the right of free speech to spend unlimited dollars on elections as a way to ward off the social and political revolutions of the country. 1960s. The series of conservative court decisions, which resulted in Citizens unitedwhich allowed corporations and billionaires to spend freely through political action committees, has already deeply distorted our politics. But for an industry to spend $119 million and counting to influence its narrow problem is a dangerous new frontier.
» LEARN MORE: The other giant threat to American democracy is a conspiracy hatched 53 years ago | Will Bunch
“Every company CEO is looking at this crypto money policy playbook right now,” said Claypool of Public Citizen. He fears that other industries with even greater financial resources — for example, big oil companies that want the government to approve more offshore drilling leases — will soon spend unlimited dollars on similar political crusades. Such spending “by an industry with greater resources could get pretty ugly,” he said.
It’s not a pretty picture now. Who is lobbying Republican and Democratic Party leaders on behalf of ordinary people who don’t want to be ripped off and who don’t understand why we are spending so much energy on a product that probably isn’t even necessary? Even Trump was right when he said crypto regulations should be “very, very high.” How ironic if American democracy is not collapsing under a ton of political dollars, but under a handful of Bitcoin.
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