In the world of politics, alliances are often fleeting and prone to change. The popular HBO series Game of Thrones is a perfect example of this phenomenon, where great houses frequently switch sides as they navigate the complex web of power struggles. Similarly, the 2024 presidential election in the United States has witnessed a significant shift in the relationship between cryptocurrency (crypto) advocates and politicians.
A History of Hostility
The Biden administration has been openly hostile to tech and crypto, with various regulatory efforts aimed at curbing their growth. The administration’s actions include:
- Operation Choke Point: An effort to encourage regulated banks to cut off crypto businesses from the banking system
- IRS Rule: A rule treating crypto wallet developers as if they were brokers, subjecting them to stricter regulations
- Justice Department Charges: Developers of privacy protocols built in compliance with Treasury Department guidance charged with violating money transmitter laws
The Biden administration’s regulatory body, the Securities and Exchange Commission (SEC), has also taken a tough stance on crypto. Under Chairman Gary Gensler, the SEC has asserted that all crypto tokens are unregistered securities, making it difficult for them to register with the agency.
A Positive History: Trump’s Crypto Ties
In contrast, the Trump administration had a more positive relationship with crypto. His nominees for key regulatory positions were generally pro-innovation and pro-crypto:
- Chris Giancarlo: Nicknamed "Crypto Dad" as CFTC chairman
- Hester Peirce: Nicknamed "Crypto Mom" as SEC commissioner
- Heath Tarbert: Now general counsel at Circle
The Trump administration’s history with crypto suggests that if he were to return to power, his team would likely be more favorable towards the industry.
A Common Enemy: Elizabeth Warren
Massachusetts Senator Elizabeth Warren has been a vocal critic of both crypto and Trump. Her influence on the Biden administration’s regulatory nominees is seen as one of the main reasons for their war on crypto. This shared enemy may cement Trump’s support for crypto and secure a lasting alliance between the two.
A Cry from the Crypto Community
The crypto community has been critical of Democratic candidates reaching out to them in this election, likening it to cheating spouses caught in the act. While they might profess regret and love, it’s hard to forgive years of attacking the technology without proof of a genuine change of heart.
A Vote for the Enemy of My Enemy
In this election, many crypto advocates are voting for Trump as the best chance for their industry to thrive in a future free from an existential threat posed by the U.S. government.
Conclusion
The relationship between crypto and politics is complex and ever-changing. As we navigate the shifting alliances in American politics, it’s essential to understand the historical context and the positions of key players. With the 2024 presidential election approaching, the future of crypto in the United States hangs in the balance.
By J.W. Verret, a guest author for Cointelegraph and an associate professor at George Mason University’s Antonin Scalia Law School. He is a practicing crypto forensic accountant and also practices securities law at Lawrence Law LLC.