Cryptocurrency appears to be the star of a political bidding war that's roiling the Democratic Party while top Republicans embrace it. Crypto-friendly Democrats are cautioning Vice President Kamala Harris against ceding the still-growing technology to the GOP, as consumer protection-minded progressive Democrats say the crypto industry is tantamount to institutionalized snake oil. Sen. Debbie Stabenow (D-Mich.) is chair of the Agriculture Committee, which will soon consider a bill to transfer more crypto authority to the Commodity Futures Trading Commission, a move largely seen as friendly to the industry. She told POLITICO’s Jasper Goodman and Eleanor Mueller she feels “very good” about Harris on crypto after a conversation with the vice president. Rep. Wiley Nickel (D-N.C.) said “it’s important to reset” Democrats’ relationship with the crypto industry, and that “the initial steps or initial indications we have are good.” Meanwhile, Rep. Brad Sherman (D-Calif.), an outspoken critic of crypto, made a plea for Harris to take a skeptical stance that he said was in line with other Democratic positions. “If she listens on the issue of enforcing our income tax laws, our sanctions laws, our human trafficking laws, she’ll continue to reach the same conclusion that the Biden-Harris administration has made,” he said. This tension in the Democratic party comes as the Republican nominee, former President Donald Trump, who once trashed crypto, attended the world’s largest Bitcoin conference last week in Nashville. Both parties are now trying to keep pace with the industry’s massive growth in recent years, a remarkable comeback from the epic collapse of FTX. One way crypto has tried to burnish its status as a financial-industry player is by flooding Washington with cash. POLITICO’s Caitlin Oprysko reports that crypto companies and trade associations have spent $13 million on lobbying in the first half of this year. The number is all the more striking because it doesn’t include any spending from Binance, which stopped lobbying this year after former CEO Changpeng Zhao was sentenced to prison for failing to prevent money laundering on his platform. The biggest spenders on direct lobbying have been the firm Coinbase, the trade group the Blockchain Association, and Riot Platforms, a bitcoin miner. Crypto firms have also poured money into a network of industry super PACs that have been spending millions on electing crypto-friendly politicians. Major funders include Coinbase, Ripple, venture capital firm Andreessen Horowitz and investors Cameron and Tyler Winklevoss, among others. Crypto-friendly legislation has backers from both parties. In addition to Stabenow’s legislation that is waiting for a committee vote, the House passed a bill co-sponsored by House Financial Services Chair Patrick McHenry (R-N.C.) to overhaul the crypto regulatory regime that critics panned as too industry-friendly. On Wednesday, crypto-friendly Sen. Cynthia Lummis (R-Wyo.) introduced legislation that would create a “strategic bitcoin reserve” for the United States, echoing a promise Trump made in Nashville. In light of all the spending and legislative action this campaign season, it’s perhaps not surprising that the industry is optimistic no matter who occupies the next White House. Harris is “neutral, and we need to provide education to the campaign to understand why this is a critical issue,” Sheila Warren, CEO of the Crypto Council for Innovation, told Jasper and Eleanor.
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