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Donald Trump is making presidential history all over again: He’s poised to be the first major party nominee to court cryptocurrency traders. It’s leaving some Democrats feeling uneasy.
Trump told crypto backers at Mar-a-Lago on Wednesday that they “better vote” for him because of the way the Biden administration has unleashed a regulatory crackdown on the industry.
“They are against it,” he said at an event promoting his own non-fungible token, or NFT.
Trump’s overt play for the crypto faithful is a big shift from the criticism he dished out in his first term, but it’s not unexpected. The GOP has become increasingly friendly toward bitcoin and other digital assets in recent years, while key Democrats remain at odds over whether to grant the industry legitimacy after a series of scandals. Trump’s direct embrace is a landmark moment for crypto firms that have undertaken an intense Washington lobbying effort and are spending tens of millions of dollars to influence the 2024 elections.
“President Trump’s remarks signal a sea change in the importance of digital assets this election cycle,” said Kristin Smith, CEO of the Blockchain Association, a top crypto industry lobbying group.
The issue is giving Trump a fresh line of attack on Biden. Securities and Exchange Commission Chair Gary Gensler, a Biden nominee, has pursued an extensive series of enforcement actions against crypto firms that he says are flouting federal securities laws. The White House on Wednesday angered crypto advocates when it threatened to veto bipartisan House legislation that would undo SEC guidelines the industry hates.
“Gensler is very much against it,” Trump said Wednesday of the administration’s approach to crypto. “The Democrats are very much against it.”
Not all Democrats are against it. Twenty-one Democrats on Wednesday defied Biden’s veto threat and joined with Republicans in voting for a resolution to overturn SEC crypto guidance. Trump’s embrace could add a new partisan tinge to the debate over crypto regulation — a risk for the industry, which is courting both sides.
Following Trump’s comments, Rep. Wiley Nickel, a pro-crypto North Carolina Democrat, wrote on X that his party “cannot hand this issue to the Republicans.” But key Democrats like Sen. Elizabeth Warren (D-Mass.) have stood in the way of industry-friendly policies while warning of risks to consumers and the financial system, as well as crypto’s role in financial crime.
It’s unclear, though, whether courting digital asset traders can win a significant number of votes. A Pew Research Center Survey released last year found that most Americans weren’t confident in crypto’s safety or reliability. The industry has suffered major blowups in the last few years, including the implosion of the FTX exchange in a huge fraud scandal and the U.S. government’s $4.4 billion settlement with the Binance exchange over allegations that it facilitated financial crimes.
A poll released by crypto industry groups this week showed that more than 20 percent of voters in six key swing states identify crypto as a major issue. A separate nationwide survey of registered voters commissioned by the crypto firm Paradigm found that crypto ownership is higher among communities of color and young people — key constituencies that helped boost Biden in 2020 but are now proving to be challenging for him to win over.
Crypto has gained support from politicians on the right who tout it as an alternative to the mainstream financial system. The Paradigm poll found earlier this year that crypto owners favor Trump over Biden, 48 percent to 39 percent, with 13 percent undecided.
“President Trump understands freedom and liberty, he knows that innovation needs to be protected here in America and he knows that the role government should play is to make sure we create an environment in which innovation grows and prospers,” said Ohio GOP Senate candidate Bernie Moreno, a longtime crypto booster. “That’s why it’s no surprise to see him making those comments about crypto.”
Former Republican presidential hopeful Vivek Ramaswamy, who is seen as a potential cabinet official in a second Trump administration, championed crypto during the GOP primary and helped push the former president to come out against the adoption of a government-backed central bank digital currency. Crypto firms also oppose a potential Federal Reserve digital currency, and conservatives warn it’s a threat to privacy.
“I was impressed with President Trump’s ability to dive deep into a subject area that was newer to him,” Ramaswamy said in an interview last month.
Ramaswamy declined to comment on whether he hopes to work on crypto policy in a second Trump administration, saying he is “focused on winning the election.”
Trump’s support for digital assets wasn’t always a given. He derided crypto on social media during his presidency, and key cabinet members took a skeptical approach to the industry. Trump’s SEC chair initiated major litigation against a prominent crypto firm.
But Trump has gone on to dabble in crypto since leaving office. He has issued his own NFT, and as of last August he owned $2.8 million in a crypto wallet.
“It’s pretty remarkable to see, in the few years since he’s left office, the 180 that he has done on crypto,” said Cody Carbone, chief policy officer at the Chamber of Digital Commerce, a crypto advocacy group. “It’s pretty great to see him come out and be supportive of the industry.”
Trump’s embrace of crypto carries potential risks. Digital asset markets have experienced dramatic booms and busts in recent years, and key industry players like Sam Bankman-Fried have been sentenced to prison time for breaking the law.
The shift also carries risk for Washington’s crypto lobby. Trump could make the politics of digital asset regulation even more partisan moving forward. The industry has spent years — as well as millions of dollars in campaign contributions — trying to build support in both parties, which will likely be key to enacting legislation that crypto firms want.
“I don’t want this to become a partisan issue,” Carbone said. “I think this presents an opportunity for Democrats to start to really have an introspective look and educate themselves on the benefits of digital assets.”
