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Donald Trump’s family is teasing more details of their latest ‘crypto’ grift while Democrats try to put the digital asset community at ease over what a Kamala Harris presidency might mean for the sector.
Trump’s sons, Don Jr. and Eric, began pimping a purported decentralized finance (DeFi) product of some sort last week but weren’t all that forthcoming regarding the details. Don Jr. later participated in an online Q&A in which he declared that the plan was to “take on a lot of the banking world. I think there has been a lot of inequality in that only certain people can get financing.”
Earlier this week, Eric spoke to the New York Post, revealing that “digital real estate” would play a role in the Trump Organization’s new cash grab. It appears to involve a plan for more efficient processing of loan applications by Americans who allegedly “cannot be banked … meaning they will be rejected for most loans from most institutions.”
Eric claimed that DeFi would give these unbanked masses “the ability to almost instantaneously be approved or denied from a lender based on math, not policy. Money could be in their account in minutes, not months… It’s equitable. It’s collateral anyone can get access to and do so instantly.”
Maybe it’s our cynical ears, but promising easier access to real estate financing by people who really can’t afford to buy real estate conjures up uneasy echoes of the subprime mortgage fiasco that crashed the global economy in 2008. But apparently, “this time it’s different,” courtesy of DeFi.
There’s also the fact that the last time the Trump Organization pledged to help the ‘little guy’ get into real estate, it ended with a $25 million legal settlement on behalf of all the suckers who’d been duped by the sham “who wants to be a millionaire” promises of Trump University.
Trump has seemingly made “crypto” a key plank of his 2024 election pitch, even though his understanding of blockchain technology isn’t the best, and his interest likely begins and ends with the millions he can cajole from ‘crypto bros’ with a few well-timed comments.
This has analysts at Wall Street brokerage Bernstein predicting the crypto bull market to end all bull markets should Trump be elected in November. Conversely, a Harris victory would allegedly unleash a bear market not seen since that grizzly mauled Leonardo DiCaprio a few years ago.
In fact, Harris’s current polling lead has been credited with/blamed for the recent weakness of the BTC token, a steaming pile of damp coals that not even Tether minting billions of additional stablecoins seems able to reignite.
Harris has yet to declare a policy position on “crypto,” although, to be fair, her campaign isn’t yet a month old and has yet to establish firm policies on any number of issues—most of which are infinitely more important to infinitely more people than “crypto.”
The bros cried foul when Harris announced several campaign advisors, including Brian Nelson, a former Treasury official who participated in the department’s successful prosecution of the Binance digital asset exchange. However, Harris also appointed David Plouffe, a former Obama aide who once served on Binance’s (now disbanded) global advisory board.
The fact that these appointments made such waves among the crypto faithful speaks volumes as to the single-issue mindset that prevails among those with heavy bags that aren’t going to pump themselves. Political operatives hold any number of positions on any number of subjects at any particular moment in time, so stop reading so much into every little twitch they make.
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Nonetheless, Democrats have been trying to poke holes in the narrative that only Trump is good for ‘crypto.’ Last week, Rep. Ro Khanna (D-CA) hosted a virtual meeting that included National Economic Council director Lael Brainard, White House chief of staff Bruce Reed, and Deputy Treasury Secretary Wally Adeyemo. The industry side was represented by Mark Cuban and execs from Circle, Coinbase (NASDAQ: COIN), Kraken, Ripple, Uniswap, and others.
There’s been no formal readout of the meeting, but some regulatory scofflaws reportedly spent most of their time bitching about being the targets of Securities and Exchange Commission (SEC) probes. Others cried bullshit when Adeyemo denied the existence of an active campaign to “debank” crypto firms, aka the unproven conspiracy theory known as “Chokepoint 2.0.”
Harris didn’t directly participate in the August 14 town hall put on by “Crypto4Harris,” a group not formally affiliated with her campaign. However, plenty of other Democratic stars did participate, including Reps Adam Schiff (D-CA), Wily Nickel (D-NC) and Elissa Slotkin (D-MI), Colorado Gov. Jared Polis, Senators Debbie Stabenow (D-MI), Kristen Gillibrand (D-NY) and Senate Majority Leader Chuck Schumer (D-NY).
Stabenow, who chairs the Senate Agriculture Committee, recently walked back plans to introduce an updated version of her 2022 digital asset bill. Stabenow told the town hall that her inability to make progress was because Republicans had been “playing games.” Like the Dems’ doomed border bill, Trump’s minions appear determined to deny the other side any legislative victories ahead of November’s election.
But Schumer raised expectations that Stabenow’s bill might rise again with his claim that passing some form of digital asset legislation before the conclusion of this session of Congress “is absolutely possible, even in these divided times.”
Schumer asked for support “to make sure that any proposal is bipartisan,” but Schumer also emphasized the need to pass “sensible” legislation. This would include “guardrails to keep users of this technology safe, to preserve our national security and to ensure that this tech can’t be abused by criminal organizations.”
Schumer said the pols were present “because we all support … Harris to be our next president, and we all believe in the future of crypto.” But even Nickel was a bit taken aback by Schumer’s pledge, calling it “a big deal.” Nickel said he expects to hear from Harris “soon” regarding a potential “reset” of Democratic policies regarding digital assets.
Nickel also reminded the audience that “there’s only one candidate running for president who’s called crypto a scam, and that’s Donald Trump.” Referencing Trump’s well-documented history of flip-flopping on issues based on their capacity to line his pockets, saying Trump “is just totally full of shit.”
Purple chain
Many “crypto” luminaries went full-throated in their public support for Trump shortly before Harris replaced Joe Biden on the Dem ticket, and the resulting reversal of poll positions may have them regretting that decision. Tellingly, some execs have begun trying to reverse the perception that ‘crypto’ is a partisan issue, hedging their bets should Trump’s downward spiral prove irreversible.
Speaking recently at the Asia Blockchain Summit in Taipei, Coinbase Chief Legal Officer Paul Grewal said his “number one concern is that crypto becomes politicized and becomes a partisan issue in ways that, at the very least, slow and perhaps even worse, threaten its continued growth and development.”
Speaking to CNBC this week, Circle CEO Jeremy Allaire said “crypto in many ways, has been treated as a bipartisan issue for quite some time. You saw major bills in stablecoin, major bills in market structure advancing, and so it looked like this was a purple issue.”
Allaire said he saw “a concerted effort, both from the [Biden] administration and the Harris campaign, to really get to know the issues, the players, the industry, the policy issues. I think what the industry is looking for very, very clearly is clear statements … from Harris as part of her economic policy agenda.”
Not everyone is supportive of Harris potentially embracing crypto. Dennis Kelleher, CEO of the nonprofit financial reform group Better Markets, issued an op-ed on August 15, saying Harris had a lot of policy issues on her plate but “caving to threats from the crypto industry should not be one of them.”
Kelleher warned that crypto’s “big goal is to pick its own regulator and get a veneer of legitimacy, but not be regulated much at all.” Kelleher noted Harris’s “long and strong record as a prosecutor who fights for consumer and investor protections and against financial industry lawbreaking,” something Kelleher said was at odds with “the crypto industry’s extensive lawbreaking rap sheet.”
Biting the hand that feeds
Both Circle and Coinbase are contributors to Fairshake, the deep-pocketed political action committee that amassed nearly $200 million to boost pro-crypto candidates—and punish crypto critics—regardless of party affiliation.
Fairshake recently declared its intention to spend $12 million to dethrone Rep. Sherrod Brown (D-OH), who has been a reliable thorn in crypto’s side on Capitol Hill. That would top the $10 million Fairshake spent to defeat the bid by Rep. Katie Porter (D-CA) to take over the late Dianne Feinstein’s Senate seat.
But Fairshake also pledged $3 million each to support Democrats Elissa Slotkin and Ruben Gallego, who are running for Senate seats in Michigan and Arizona, respectively. This has apparently put some Republican noses out of joint, who felt that their party’s vocal crypto support had guaranteed a zero-sum pro-GOP/anti-Dem approach from crypto super PACs.
One unnamed GOP strategist said, “Coinbase and Fairshake are attempting to become toxic to Republicans” by supporting candidates opposing GOP Senate candidates. An ‘industry leader’ expressed similar confusion, saying, “Republicans are WTF about what’s going on with Fairshake, and I think that’s a pretty bad omen for the industry.”
Meanwhile, the Coinbase-funded astroturf advocacy group Stand With Crypto just announced The America 💜Crypto Tour 2024, an “epic concert series across 5 swing states” (Arizona, Nevada, Michigan, Wisconsin and Pennsylvania) from September 4-13.
It’s unclear what performers might have been willing to accept some crypto millions to perform at these shindigs, but we’re really hoping the Winklevoss twins’ utterly sucktastic band Mars Junction is on the bill. And that they play that song that lets voters yell back at them: ‘F*ck you, I won’t do what you tell me.’
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