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Crypto Advocates Must Get Involved in Politics to Hold the Line on Regulations
Regulatory overreach into the crypto space is not inevitable, but advocates need to get involved with politics to ensure it doesn’t manifest. We’ve already seen what happens with bodies like the SEC regulate through enforcement, or Treasury pulls the trigger on its blacklist nuclear option.
As Canadian Conservative party MP Michelle Rempel Garner told the audience at the 2022 Blockchain Futurist Conference in Toronto on Wednesday, “Do not assume that government understands what you understand.”
We believe the 2022 and 2024 election cycles will be the first time crypto will take its place as a serious platform issue, and one way to head off government overreach is getting involved as the legislative sausage is made. We are not alone in thinking this.
Brock Pierce, co-founder of the stablecoin Tether, tells Digital Future Daily that after months of flirting with a Vermont Senate run, he’s decided to launch a super PAC instead.
This election cycle is the first in which crypto has become a bona fide issue and the industry has emerged as a significant source of political funding. Crypto’s backers have launched several PACs to promote the industry and their own pet issues, led by Sam Bankman-Fried, founder of crypto exchange FTX, who has dropped roughly $40 million in political giving this year. (Much of Bankman-Fried’s spending has been to promote a rationalist approach to philanthropy called effective altruism.)
The results so far have been mixed. Pro-crypto Senate candidates Blake Masters and J.D. Vance, both backed by pro-crypto billionaire and PayPal co-founder Peter Thiel, won high-profile Republican primaries in Arizona and Ohio, respectively. Elsewhere, crypto donors and candidates have floundered. In California, Democrat Brad Sherman, the most vocal crypto critic in the House, easily fended off pro-crypto primary challengers. In Oregon’s Sixth District, Matt West, a decentralized finance developer, and effective altruist Carrick Flynn, who benefited from millions of dollars' worth of support from Bankman-Fried, both fell short in the Democratic primary.
But as Pierce’s investment illustrates, the crypto-wealthy continue to build the infrastructure for converting profits into lasting political influence. Many close to the industry consider this year a dress rehearsal for 2024, when they expect crypto to become a bigger issue and crypto money to become a bigger factor.
Fighting government’s attempts to regulate the crypto space will take place on many fields – in the courts, through the technology itself and in the legislative arena. We all need to figure out how to deploy our resources to defend on all these fronts.