Progressives Sound Alarm as Harris Courts Crypto Industry

Democratic presidential nominee Kamala Harris' increasingly open embrace of cryptocurrency during her 2024 bid for the White House has sparked alarm among progressives, who have pointed to the still-nascent industry's pervasive fraud and opposition to regulatory guardrails as all the evidence the vice president should need to end her courtship of the sector.

Semaforreported Thursday that in addition to speaking publicly about "a friendlier approach to cryptocurrency than President Joe Biden," Harris is "dispatching aides to court well-heeled crypto investors and their Democratic allies in Congress."

"Harris debuted her newly crypto-coded message in remarks to Wall Street donors this past weekend," the outlet added, "and her campaign's quiet work with crypto allies indicates that she sees a space to compete on that turf with former President Donald Trump—who this month endorsed a still-unclear crypto platform launched by his sons."

Trump, the Republican presidential nominee, said earlier this week that he believes cryptocurrencies have "a great future" and suggested the U.S. could pay off the national debt with digital assets. Venture capital billionaires Marc Andreessen and Ben Horowitz have donated to Trump's campaign—contributions "motivated by areas like crypto and AI regulation," Axiosreported.

Trump's running mate, Sen. JD Vance (R-Ohio), is friendly with the crypto industry and personally owns hundreds of thousands of dollars worth of bitcoin.

Harris, for her part, gave a nod to the cryptocurrency industry during a major economic policy speech in Pittsburgh on Wednesday, saying she wants the U.S. to "remain dominant" in "emerging technologies" such as the blockchain.

"Acceding would not only set the dangerous precedent that motivated industries can purchase the regulatory framework that best suits their interest, but also open Americans to fraud."

Harris' economic policy platform states that, if elected in November, she would "encourage innovative technologies like AI and digital assets while protecting our consumers and investors."

Billionaire investor and outspoken Harris supporter Mark Cuban told Semafor that he intends to visit Capitol Hill to "personally lobby lawmakers on any major crypto bill that gets a vote in the future, whether it’s industry-favorable or not."

In a statement earlier this week, the Revolving Door Project (RDP) warned that the Harris campaign's "acquiescence" to crypto would "lead to disaster."

"The cryptocurrency industry has doggedly pursued its mission to flout longstanding securities laws and robust SEC oversight," said Jeff Hauser, RDP's executive director. "Weak regulation is crucial to the industry's continued business strategy of serving as a conduit for money laundering, assisting ransomware rings, terrorist organizations, and those importing fentanyl."

"The industry has defiantly moved past the stench of Sam Bankman-Fried's fraud-backed influence campaign to flood key congressional races with cash in a transparent attempt to strongarm Democrats into acquiescing to their demands," he continued. "Acceding would not only set the dangerous precedent that motivated industries can purchase the regulatory framework that best suits their interest, but also open Americans to fraud, increased ransomware, and other illicit behavior pervasive across the cryptocurrency industry."

Dean Baker, senior economist at the Center for Economic and Policy Research, toldThe Washington Post on Thursday that while he gets that Harris "doesn't want to alienate the crypto folks," the federal government "should not be encouraging speculation in this stuff."

"This is just gambling," said Baker. "I don't think we need to make it easier to do illegal transactions—blackmailing, drug dealing, whatever."

Crypto industry spending on federal lobbying surged to an all-time high of $24.7 million in 2023, according to OpenSecrets, and the cash blitz has continued this year as major digital currency asset players and their congressional allies in both parties fight off regulatory efforts.

The industry has also spent big on the 2024 elections: An analysis released last month by the consumer advocacy group Public Citizen found that crypto firms have poured more than $119 million directly into federal elections so far this year, making them "by far the dominant corporate political spenders."

"Crypto-influenced lawmakers bending over backwards to benefit Big Crypto means weaker protections preventing individual consumers from being defrauded by reckless crypto scams—and softened regulations protecting our financial system from destructive innovations that exploit consumers while enriching insiders," Public Citizen said at the time. "The influence of Big Crypto is more evidence a constitutional amendment is needed to overturn Citizens United—and restore our democracy to one where people call the shots, not corporations."

Hauser also expressed concerns about "the idea that crypto insiders would have any sway in policymaking," which he warned would "just further put Americans in harm's way, once again disproportionately harming the poor and communities of color."

"Harris' promise to balance the industry's interests with those of consumers is an obvious contradiction," said Hauser. "Crypto is a haven for businesspeople with nefarious or criminal intent. The rampant fraud and criminal behavior in the very young industry—not just from FTX, but from Binance, OneCoin, Digital Currency Group, and countless others—is unprecedented in recent American history."