Trump courts cryptocurrency traders, leaving some democrats uneasy

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11th May 2024 – (New York) Former President Donald Trump is set to make history as the first major party nominee to actively court cryptocurrency traders, causing unease among some Democrats. During an event promoting his own non-fungible token (NFT) at Mar-a-Lago, Trump urged crypto supporters to vote for him due to the regulatory crackdown on the industry initiated by the Biden administration.

This overt move by Trump marks a significant shift from his previous criticisms of cryptocurrencies during his first term. The Republican Party has increasingly shown favour towards digital assets, while Democrats remain divided on granting legitimacy to the industry following several scandals. Trump’s direct embrace of cryptocurrencies is a landmark moment for crypto firms, who have been lobbying intensively in Washington and investing millions of dollars to influence the 2024 elections.

Kristin Smith, CEO of the Blockchain Association, a leading crypto industry lobbying group, stated that “President Trump’s remarks signal a sea change in the importance of digital assets this election cycle.”

Trump’s support for cryptocurrencies also provides him with a fresh line of attack against President Biden. Securities and Exchange Commission Chair Gary Gensler, a Biden nominee, has been pursuing numerous enforcement actions against crypto firms for violating federal securities laws. The Biden administration’s threat to veto bipartisan House legislation seeking to overturn SEC guidelines further angered crypto advocates.

While not all Democrats oppose cryptocurrencies, 21 Democrats defied Biden’s veto threat and joined Republicans in voting for a resolution to overturn SEC crypto guidance. However, prominent Democrats like Senator Elizabeth Warren have been critical of the industry, citing risks to consumers, the financial system, and financial crime.

The impact of courting digital asset traders on the election outcome remains uncertain. A Pew Research Center survey revealed that most Americans lack confidence in the safety and reliability of cryptocurrencies. The industry has faced significant setbacks in recent years, such as the FTX exchange’s fraud scandal and the U.S. government’s $4.4 billion settlement with the Binance exchange over allegations of facilitating financial crimes.

A poll conducted by crypto industry groups in key swing states highlighted that over 20% of voters consider crypto a major issue. Another nationwide survey commissioned by crypto firm Paradigm found that crypto ownership is higher among communities of colour and young people, two key demographics that helped Biden in the 2020 election but are proving challenging to win over now.

Cryptocurrencies have gained support from right-leaning politicians who view them as an alternative to the traditional financial system. The Paradigm poll earlier this year showed that crypto owners favor Trump over Biden, with 48% to 39%, and 13% undecided.

The crypto industry’s lobbying efforts face new risks with Trump’s embrace, potentially making digital asset regulation a more partisan issue going forward. The industry has aimed to build support in both parties through campaign contributions, recognizing that bipartisan backing will be crucial in enacting favourable legislation.