The crypto industry is thrilled about its association with the Trump family because Donald Trump has positioned himself as a pro-crypto president. He has appointed individuals to key positions who support cryptocurrencies and has promised to advance crypto in the United States. This marks a significant shift from years of feeling antagonized by the federal government and facing lawsuits from the SEC.
The crypto industry spent $130 million during the 2024 election cycle, making it one of the most aggressive spending sprees by any industry in the post-Citizens United era. This funding helped shape key congressional races, including the defeat of Sherrod Brown, a prominent crypto critic, and the election of Bernie Moreno, a Bitcoin enthusiast. The industry's influence extended to both Democratic and Republican candidates, though it was firmly behind Donald Trump at the presidential level.
The crypto industry aims to shift regulatory power from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC), which is perceived as more friendly. They also seek to reduce aggressive enforcement actions against crypto companies, such as dropping pending lawsuits or settling them on favorable terms. Additionally, they hope for executive appointments that align with their interests, such as replacing SEC Chair Gary Gensler with a more industry-friendly figure.
Donald Trump has a personal financial stake in the crypto industry through his involvement with World Liberty Financial, a crypto company he co-founded. The company's success depends on favorable federal regulations and appointments. Under the compensation agreement, the Trump family receives 75% of token sales from World Liberty Financial, meaning that less regulation and more crypto adoption directly increase Trump's wealth.
Bitcoin's rise has led to its integration into mainstream finance, particularly through the approval of Bitcoin ETFs by the federal government. Companies like MicroStrategy have redefined themselves by investing heavily in Bitcoin, and their stock prices now closely track Bitcoin's value. This integration means that even individuals with no direct interest in crypto, such as those with retirement funds or college savings, may have a financial stake in Bitcoin's performance.
Some in the crypto industry worry that its close association with Trump and the Republican Party could make it politically vulnerable if Democrats regain power. While the industry has tried to maintain a bipartisan approach, its strong support for Trump and his administration's pro-crypto stance may make it difficult to separate crypto from the Trumpian brand in the future.
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Hey, I'm Ryan Reynolds. Recently, I asked Mint Mobile's legal team if big wireless companies are allowed to raise prices due to inflation. They said yes. And then when I asked if raising prices technically violates those onerous two-year contracts, they said, what the f*** are you talking about, you insane Hollywood a**hole?
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These events are always a little wild. You've got cryptocurrency diehards. Some pay $10,000 for special event access. Others dress up in costume. It's, you know, everyone from, you know, radical libertarians to like former Wall Street bankers who are super interested in crypto now. That's David Yaffe Bellany, who covers the crypto industry for The New York Times.
And so the scene around Eric Trump was really no different, except that suddenly the crypto world is just thrilled about its association with the Trump family. So you had people posing for photographs in front of giant cutouts of Donald Trump and Elon Musk, people holding up signs proclaiming their support for the Trump family. And so it was a celebration of this political movement in the US as much as it was a celebration of Bitcoin.
What does Eric have to say to this crowd? He says to them, my dad is with you. You know, he's going to be the Bitcoin president. He's going to advance crypto in the United States. He's already started doing that. He's appointed people to key positions who support cryptocurrencies. And he's going to keep doing that because the family believes in this technology. That was his message. I mean, that must have been just exactly what these folks wanted to hear.
It was what they expected to hear, but they were thrilled to hear it again, let me tell you. I mean, this industry has sort of been in the political wilderness in the United States for years, it's felt. Antagonized by the federal government, it's been on the receiving end of lawsuits by the SEC. And suddenly there's just been this sea change where the new political elite in the United States is all in on crypto.
That is happening just about the same time that Bitcoin recently hit this milestone of $100,000 valuation per coin. Are these separate events? Do they exist in some Venn diagram of coming together? Like, what's the significance of Bitcoin hitting $100,000 while the Trump folks are ascendant and returning to office?
This is not a coincidence at all. There's a direct cause and effect relationship here. Trump embraced crypto on the campaign trail starting sort of the middle of 2024. And that helped boost the price of Bitcoin. And then his election victory sent it even further into the stratosphere. Bitcoin actually broke its all-time record on election night, you know, while states were beginning to fall for Trump.
And the surge has just continued, you know, since his victory was confirmed and, you know, as he made sort of even more moves to kind of boost the industry. Today on the show, crypto money helped send Trump to the White House. Now his administration wants to send crypto to the moon. I'm Lizzie O'Leary, and you're listening to What Next TBD, a show about technology, power, and how the future will be determined. Stick around. ♪
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Just over two years ago, crypto was the butt of a lot of jokes. FTX had failed dramatically, its CEO Sam Bankman-Fried was arrested, and the price of Bitcoin had fallen to roughly $16,000, a far cry from what it's worth today. Fast forward to now, the players on the board have changed, but many of the arguments for crypto have not.
The sales pitch, you know, at its most basic is still the same, actually. And it's that crypto is a way to get rich quickly. I mean, frankly, that that's the main selling point to, you know, people like the Trump family and also just to a lot of like average investors who are maybe getting interested in Bitcoin now. And the evidence is there for all to see, you know, Bitcoin surging. You know, the other cryptocurrencies have sort of gone with it.
And so, you know, the idea is that, you know, this is a way to sort of solidify your personal wealth, essentially. But there are other aspects to it that have kind of helped the industry. One is that, you know, mainstream finance companies, the kind of black rocks and fidelities of this world,
are much more interested in crypto than they used to be. And mainly that's because the federal government earlier this year approved a financial product called a Bitcoin ETF or exchange traded fund.
ETFs are really popular on Wall Street. They're really popular with just average investors who don't know anything about crypto. And so that has sort of boosted crypto's mainstream legitimacy, and it's also become part of the industry's sort of sales pitch to the world. We are now kind of enmeshed in mainstream finance in a way that we've never been before.
But what I hear you saying is this is an asset class. You are not using the kind of language that the DeFi, you know, decentralized finance people were using for five years ago, as in like, this is the tool of the future. We can take away the central bank. This sounds much more like, yeah, you ride this thing up and down, not completely unlike any other asset.
Yeah, I mean, you still hear some of that kind of DeFi language, you know, this idea of Web3, a kind of internet that's built on top of cryptocurrencies where sort of every aspect of your online experience can essentially be like boiled down to a crypto token that you own and invest in. That's still out there, but I think you're right. It's faded a bit. Some of that rhetoric has faded.
And now, you know, the buzzwords that you hear are things like institutional adoption. And, you know, you have these crypto guys who were once, you know, radical libertarians, like posting memes about how much they love BlackRock. And it's just a sort of amazing kind of turnabout in the history of this technology.
What's also amazing is the scale of influence that the industry is now capable of exerting. The crypto industry put $130 million into the last election, and it expects to get something back. First of all, it's worth just sort of reckoning with the size of that number. I mean, this is one of the most aggressive spending sprees by any industry in the kind of post-Citizens United era.
of American politics. It's just like an astounding, audacious amount of spending. And it shaped some key congressional races. The crypto industry spent $40 million trying to unseat Sherrod Brown in Ohio. And did. And did. Not only was he an outspoken kind of crypto
crypto critic, but he also chairs the Senate Banking Committee. And so he was really in a powerful position to kind of shape US policy on crypto. The industry, you know, spent all those millions to defeat him and they succeeded and they elected Bernie Moreno, who is
is a Bitcoin enthusiast who founded his own crypto business a few years ago. So they've replaced one of the most powerful and outspoken opponents of crypto with somebody who loves the technology. And that's just a huge success. And similar examples of that played out in lower profile races in the House. And it's just a huge kind of transformation of the congressional landscape for the crypto industry.
And now that that's happened, you know, the industry is thinking about what legislation can we push through that would improve our prospects. Yeah, what do they want? I mean, after all, they will have in Donald Trump an executive who says he's going to be a pro-crypto president. So presumably there are some, you know, prizes that the industry wants. What are their goals? So it's worth breaking down what they want legislatively and then what they want from Trump.
On the legislative front, there was a bill that the industry backed and which was introduced, you know, in this past session that would essentially strip power away from the Securities and Exchange Commission, which has sort of been the top regulator of crypto and give a lot of that power to the Commodity Futures Trading Commission, the CFTC, which is a kind of smaller agency that is perceived by the crypto industry as potentially more friendly.
Less investigative power, too. Less investigative power, smaller staff, you know, historically just a lot less aggressive. And so that's been one of the kind of key legislative goals of the industry. And the thought now is that, you know, with the makeup of Congress change, that bill could actually get passed. But in fact, there's so much enthusiasm in the industry about these political victories that some people are arguing, no, let's scrap that bill. We could come up with something even better for us. So that's the legislative front.
On the executive side, the key thing the industry wanted over the last month or so were appointments that would benefit the industry. So they wanted to get rid of Gary Gensler, who's been the chair of the SEC and who is the sort of like number one, like bait noir of the crypto industry. I will fire Gary Gensler and appoint a new SEC chairman. I didn't know he was that unpopular.
The level of vitriol toward him is like really astounding. It's like not something that you ever see from an industry toward a regulator, frankly. I mean, I once talked to a crypto executive who told me on the record that Gary Gensler was the devil incarnate, that he was the devil in human flesh. This is an executive like talking about a regulator. I mean, usually, you know, even when industry is upset with government, it's a little bit more subtle than that.
So they wanted to get rid of Gensler and they wanted Trump to replace him with somebody who would be much friendlier to the industry. And they've already succeeded in that. Trump has selected as his SEC chair a guy named Paul Atkins, who is a sort of well-established securities lawyer. He's not like some kind of crazy fringe pick for the agency, but he is somebody who has –
consulted for crypto companies, who has served on the advisory board of one of the big crypto trade groups, and who is widely expected to, you know, roll back the kind of aggressive enforcement of the industry that the SEC has been doing under Gensler.
It's probably worth spelling out what power Atkins might have over the industry going forward, kind of what regulatory rules exist right now and what the SEC might be able to change.
So what the industry is hoping is that Atkins will immediately step back from the enforcement that Gensler was doing. So there are a huge number of pending SEC lawsuits against crypto companies, which in theory, the agency could immediately drop. And that would just be a huge boost for the industry. It would lift this legal cloud that has sort of hovered over a lot of the key companies in crypto for a long time.
I think, you know, even the most optimistic crypto people don't necessarily believe that Atkins is going to do that just because it would be such a kind of dramatic swerve. But he could move to settle those cases on terms that are relatively favorable to the industry.
So, for instance, the biggest of those lawsuits was filed against Coinbase, which is the biggest crypto company in the U.S. It's the top exchange for kind of buying and selling crypto in the U.S. And, you know, let's say Coinbase were hit with a, you know, $50 million fine, like, you know,
you know, that wouldn't be that big a deal. That would be about the amount that Coinbase spent trying to influence the U.S. election. And so there are various ways that those cases could get resolved quite quickly that would be extremely beneficial for the industry. When we come back, guess who else stands to gain from the new administration's crypto approach? The Trump family.
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On the other, it wasn't that long ago that Trump called Bitcoin a scam. And sometimes he just kind of says stuff like, does the industry feel like they are on a solid footing with the Trump administration? Like they are actually going to get what they want. Or some of this might just be, you know, promises that never get fulfilled.
You're right. I mean, Trump has made all sorts of campaign promises in his political career that he didn't follow through on. And there's always a risk of that.
But the difference here is that not only has he said those things, but he actually has a personal financial stake in getting those things done. And that's because before the election, he helped establish a new crypto company called World Liberty Financial that he's deeply involved in along with his sons, and which he directly profits from. And so if the SEC kind of takes the types of steps that the industry wants it to take,
then world liberty benefits and the Trump family benefits. Yeah, we talked about it with you the last time we had you on. Is there any indication that he might step back from world liberty financial? There's been no indication of that at all. And it's really interesting. It's sort of the kind of purest manifestation of the kind of classic Trump conflict of interest that we've been talking about since 2016, really. You've got a company that...
he is kind of directly invested in, which he directly profits from, and whose success hinges on federal appointments and regulations that he has direct control over. And so it's very simple and straightforward. It doesn't take any sort of mental leap to figure out how his stake in that company might affect the way he runs the government.
But we can basically draw a line that says, you know, the less regulation, the more embrace of crypto, the fewer enforcement cases, the richer Donald Trump gets, right?
It's truly as simple as that. When World Liberty launched, it started a new cryptocurrency that's kind of associated with this platform. And that cryptocurrency is called WLFI, and it's being sold to the public. But the company announced that because of the sort of SEC enforcement of the industry, this token was only going to be available to accredited investors in the United States.
And so actually the company's had a lot of difficulty selling this token and they've missed a lot of the targets for selling it. But in theory, with a new SEC chair, that legal uncertainty is lifted and the token can get marketed to a much larger swath of the public. And under the compensation agreement that the Trump family has with World Liberty Financial, the Trumps get 75% of token sales.
And so it's really as simple as that. You know, let's say, you know, the new SEC chair comes in, drops all these suits. And, you know, the next day, World Liberty sells $50 million worth of these tokens. Three quarters of that goes to the Trump family. So you can actually do the math very easily to see how much money they might make. Does any of this affect someone who doesn't hold crypto, doesn't want to hold crypto, is like, you know what?
I have a 401k or maybe, bless them, a pension. And this all seems too wacky to me. Like, should they care? They should care because what's happening is crypto is slowly kind of warming its way into the mainstream finance system. I mean, we talked about that with the Bitcoin ETF.
But, you know, it's also true in other ways as well. There's a company called MicroStrategy, which on its face is just like an enterprise software company, kind of one of those sort of boring, you know, 2000s era tech companies that sort of been trundling along for a few years. But since 2020, MicroStrategy has sort of redefined itself by buying huge amounts of Bitcoin and just borrowing, you know, tens of millions of dollars to buy more Bitcoin.
And at this point, MicroStrategy's stock essentially acts as a proxy for the price of Bitcoin. It goes kind of up and down, sort of in line with what's happening in the crypto markets.
And it's been buying even more since Trump was elected. Its executive chairman, Michael Saylor, has all sorts of influence in the new political scene. And that company, MicroStrategy, is about to get added to the NASDAQ. That's where retirement funds are invested, college savings, all those sorts of things. And so at least in a small way, even if you have no interest in crypto, you don't want to be associated with crypto, you might have some sort of financial stake in what happens with Bitcoin.
Crypto and Bitcoin, as you mentioned, have often been associated with a sort of skepticism of central banking or with libertarian ideals. But I would say over the last couple of years, despite the crypto industry contributing to Kamala Harris's campaign, it feels like the crowd has gotten Trumpier and Trumpier. And I wonder if there is a
thing here where the crypto industry has just become enmeshed with Trump world or enmeshed with being kind of on the right and whether that becomes inextricable in the future.
It's something that some people in the crypto world are really worried about, actually, because a lot of the big crypto companies are insistent on being bipartisan. They want this industry to last longer than the next four years. If the Democrats retake power, they don't want to be on the outs again because they're so inextricably associated with Trump.
And to be fair to the industry, the super PAC that spent all that money during the campaign gave to Democrats as well as Republicans. You know, Fairshake, which is the name of the PAC, backed Ruben Gallego in Arizona, Alyssa Slotkin. You know, those were high profile congressional races and Republicans were mad at the crypto companies for backing those Democratic candidates.
And so there have been donations on either side. But certainly on the presidential level, this industry was firmly behind Donald Trump. And given Trump's embrace of it and its embrace of Trump, you know, it's going to be hard to separate crypto from the kind of Trumpian brand. David Yaffe-Bellany, thank you so much for coming back on. So nice to talk to you. Thanks for having me.
And that is it for our show today. What Next TBD is produced by Evan Campbell, Patrick Ford, Shana Roth, and Ethan Oberman. Our show is edited by Paige Osborne. Alicia Montgomery is vice president of audio for Slate, and TBD is part of the larger What Next family.
And if you like what you heard, the number one best way to support our independent journalism is by joining Slate Plus. You get all your Slate podcasts ad-free, including this one, plus some other great stuff like No Paywall. All right, we will be back next week with more episodes. I'm Lizzie O'Leary. Thanks for listening.