Ryan Selkis, a cryptocurrency executive, was having dinner at Mar-a-Lago last month when he received an unexpected invitation: Former President Donald J. Trump wanted him to come 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 non-fungible tokens, the digital collectibles known as NFTs. As he reached the lectern, Mr. Selkis turned to the former president.
“There are 50 million crypto holders in the US,” the executive explained. “That’s a lot of voters.”
This message has become a political talking point in the crypto world as the industry looks to shake off a wave of scandals and establish itself as a powerful force in the 2024 election cycle. Three major crypto firms have joined forces to fund a group of affiliated super PACs, investing approximately $150 million to elect pro-crypto candidates in congressional races.
The PACs do not plan to participate in the presidential election, a spokesman for the groups said. But top crypto executives have tried to mobilize the industry behind Mr. Trump, who 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 number of crypto firms collapsed two years ago, the Biden administration began an aggressive crackdown, filing lawsuits and criminal charges against some of the industry’s leading figures. The Securities and Exchange Commission is pursuing cases that could effectively force the crypto industry out of the United States.
“The 2024 election will be the most consequential in cryptocurrency history,” said Brad Garlinghouse, chief executive of Ripple, a cryptocurrency company that has been feuding with the federal government for years. “You see how a technology becomes a partisan political issue.”
Mr. Garlinghouse, Mr. Selkis and other executives have argued that newly motivated “crypto voters” could influence the election outcome. They often cite a survey commissioned by crypto exchange Coinbase that suggests 52 million Americans own digital currencies. (The Federal Reserve estimates the total represents 7 percent of the adult population, or about 18 million people.)
But voters’ supposed passion for crypto may be less important than the industry’s campaign coffers. Ripple, Coinbase and venture capital firm Andreessen Horowitz have each donated around $50 million to crypto PACs looking to spend those funds in 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 was allied with Sen. Elizabeth Warren, a longtime crypto critic. Ms. Porter lost her race.
“A single, relatively small industry is literally trying to buy off enough politicians to hijack the public agenda,” said Dennis Kelleher, the president of Better Markets, a financial reform advocacy group. “It’s pretty breathtaking.”
The industry’s vast resources have turned a niche issue 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 several industry conferences, sometimes holding sideline fundraising meetings with wealthy executives.
President Biden has long been considered anti-crypto because his SEC Chairman Gary Gensler has sued so many cryptocurrency companies. But some Biden supporters, including investor Mark Cuban, have pushed his mending fences campaign.
The campaign was receptive to the message, Mr. Cuban said in an email. In recent weeks, Biden officials have reached out to Coinbase and Ripple asking for a discussion on crypto policy, four people familiar with those discussions said. Still, much of the industry appears to be rallying around Mr. Trump. While the former president once said that Bitcoin “seems like a scam” and has often been critical of the tech industry, he has made several supportive comments about cryptocurrencies in the last month and vowed to end the regulators’ crackdown. 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 network.
The last time the crypto industry spent large sums 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 huge setback for the crypto industry’s efforts in Washington. Last year, the SEC sued Coinbase and other crypto companies, saying the digital assets they allowed their customers to buy and sell were unregistered securities. In May, the industry won a rare legislative victory when Congress voted to repeal an SEC accounting rule that crypto companies had challenged. Mr. Biden vetoed the resolution.
Now the industry is fighting back. Fairshake has announced plans to compete in four more Senate races this year, including close contests in Ohio and Montana, where Democrats critical of cryptocurrencies are running for re-election. Cryptocurrency executives have privately credited Fairshake with reassuring some skeptical lawmakers, including Sen. Sherrod Brown, the Ohio Democrat, according to two people familiar with the conversations. Mr. Brown, chairman of the Senate Banking Committee, said in April that he was willing to advance an industry-backed bill.
A few weeks after the California Senate primary in March, Representative Adam Schiff, the Democrat who defeated Ms. Porter, visited Coinbase’s offices in Mountain View, California. He met with representatives from Coinbase, Andreessen Horowitz and crypto-focused investment firms Electric Capital, Paradigm Capital and Haun Ventures, two people familiar with the meeting said.
Mr Trump has not always been a supporter of cryptocurrencies. He said he prefers dollars to Bitcoin and tweeted in 2019 that digital currencies are “based on thin air.” But recently, some crypto executives – looking for a political savior – have embraced him.
Vivek Ramaswamy, a crypto enthusiast and former presidential candidate, has claimed Mr. Trump’s penchant for cryptocurrencies and carved out a role for himself as his envoy to the industry: On Wednesday afternoon, Mr. Ramaswamy met privately with Brian Armstrong, Coinbase’s chief executive. 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 any presidential candidate. “We will not give special treatment to any particular party,” he said in a statement. “Crypto is a truly bipartisan issue.”
Mr. Selkis, who describes himself as a libertarian, attended the event at Mar-a-Lago in May after receiving a ticket from a colleague who was unable to attend. “I’m just eating my salad and I get a cold call from the president on stage,” Mr. Selkis recalled in an interview.
That evening, Mr. Trump declared, “If you’re for crypto, you better vote for Trump.” He has also announced that his campaign would accept donations in digital currency and has pledged to end the life sentence of Ross Ulbricht, a cult hero in of the crypto world, who ran the online drug market Silk Road.
According to one of the attendees, Salman Khan, Marathon Digital’s chief financial officer, Mr. Trump met with about 15 Bitcoin mining executives at Mar-a-Lago for over an hour on Tuesday evening.
At one point, Mr. Khan said, executives showed Mr. Trump the inside of a machine used for bitcoin mining, an energy-guzzling process that has raised environmental concerns. “He liked the Made in America feature,” Mr. Khan said.
Not everyone in the crypto world agrees with Mr. Trump. At a conference in May, Marvin Ammori, a Democrat who works for crypto firm Uniswap, debated the industry’s political strategy with Mr. Selkis on stage and warned that Mr. Trump might not follow through on his campaign promises.
Still, Mr. Trump attended a fundraiser this month at the San Francisco home of David Sacks, a well-known venture capitalist, and reiterated his support for crypto, according to three attendees. The guests included Mr. Selkis, crypto executives Tyler and Cameron Winklevoss, and Paul Grewal, Coinbase’s chief legal officer, it said.
“The crypto vote has already been won by President Trump,” Mr. Selkis said. “It’s over.”
Shane Goldmacher contributed reporting.
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2024-06-17 16:10:22
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