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cryptocurrency
Trump Nomination of Crypto Banker Howard Lutnick Another 'Win for the Billionaire Class'
"Just another reminder that Trump serves the oligarchy, not the people," said former Labor Secretary Robert Reich.
Nov 20, 2024
Consumer advocacy group Public Citizen feigned surprise on Wednesday over President-elect Donald Trump's nomination of Wall Street CEO Howard Lutnick to lead the U.S. Department of Commerce.
"Oh look, another billionaire has made his way into Trump's Cabinet," said the group, noting Lutnick is also a promoter of cryptocurrency and a Trump megadonor. "The conflicts of interest are almost too many to count."
Among the conflicts are Lutnick's involvement in the crypto industry and federal and state cases against Cantor Fitzgerald.
In addition to running the Wall Street firm, Lutnick is a banker for the "stablecoin" company Tether; purchasers receive a Tether token for $1, with the proceeds invested in reserves and Treasury bonds managed by Lutnick's Cantor Fitzgerald.
As Public Citizen noted, New York Attorney General Letitia James found in 2021 that Tether and another crypto firm "recklessly and unlawfully covered up massive financial losses to keep their scheme going and protect their bottom lines."
The company is also reportedly under federal investigation over alleged criminal violations of anti-money laundering rules and sanctions.
Public Citizen also said that while co-chairing Trump's transition team, Lutnick "may also have helped arrange a meeting between Trump and Coinbase chief Brian Armstrong," who "helped steer a record amount of political spending from the crypto industry into the 2024 election."
Crypto firms poured over $119 million into directly influencing the 2024 federal elections, Public Citizen found in August, making the industry's spending second only to that of fossil fuel companies.
As Politico reported in October, even other members of Trump's inner circle have accused Lutnick of using his transition team co-chair position to take meetings on Capitol Hill and "talk about matters impacting his investment firm, Cantor Fitzgerald—including high-stakes regulatory matters involving its cryptocurrency business."
Lutnick's nomination, said former Labor Secretary Robert Reich, serves as a reminder that "Trump serves the oligarchy, not the people."
"Debris from crypto's political spending tsunami will jam up more halls in Washington than ever before if Lutnick is confirmed as secretary of commerce," said Bartlett Naylor, a financial policy advocate for Public Citizen. "The president-elect, who once correctly called bitcoin a scam, now surrounds himself with even more crypto enablers. Cryptocurrency won't return good jobs to the heartland or reduce food prices; it will only thin the wallets of those vulnerable to a now government-legitimized con."
Government watchdog Accountable.US pointed to more than $19 million in political donations Lutnick has made since 2009, nearly all of which went to GOP candidates and political action committees. He contributed $6 million to Trump's super PAC, Make America Great Again, Inc., in 2024 alone.
"Howard Lutnick's questionable qualifications to lead the Department of Commerce begin and end with his loyalty to the president-elect," said Accountable.US executive director Tony Carrk.
Tether isn't the only Lutnick-linked company that's been investigated for wrongdoing. The Securities and Exchange Commission fined Cantor Fitzgerald $1.4 million in 2023, saying the company repeatedly failed "to identify and report customers who qualified as large traders." The company also agreed to pay $16 million in fines to the SEC and the Commodity Futures Trading Commission in 2022 for using unauthorized communication channels.
Should Lutnick be confirmed as commerce secretary, Accountable.US said a "major regulatory conflict" could arise due to a dispute between the BGC Group, a spin-off brokerage of Cantor Fitzegerald, and futures and commodities exchange CME Group, over a competing trading platform BGC Group is launching.
"Lutnick's company's violations resulting in financial regulator fines and millions in right-wing political donations shows that political devotion takes precedence over actual experience to do the job in Trump's Cabinet," said Carrk.
Trump campaigned as a champion of working people as he railed against high grocery prices. As The New Republicreported on Tuesday, Lutnick has showered Trump's plan for across-the-board tariffs with effusive praise—even as leading economists warn the plan to impose tariffs on foreign imports will pass higher costs onto consumers, not foreign countries.
"In September, Lutnick told CNBC that 'tariffs are an amazing tool for the president to use—we need to protect the American worker,'" wrote Edith Olmsted. "Lutnick also gushed about tariffs at Trump's fascistic rally in Madison Square Garden last month, claiming that America was better off 100 years ago, when it had 'no income tax and all we had was tariffs.' His high praise for tariffs came even as he admitted Americans would face higher prices as a direct result."
Lutnick's nomination, said Sen. Elizabeth Warren (D-Mass.), "is a win for the billionaire class at the expense of working people."
"The across-the-board tariff plan," she said, "is a distraction from the MAGA scam to extend tax giveaways for giant corporations and billionaires like Howard Lutnick."
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Crypto Industry's $40 Million Defeat of Pro-Worker Sherrod Brown Called 'Obscene'
The Ohio Democrat lost his seat because "the billionaire-backed crypto industry donated $40 million to his right-wing opponent," lamented one labor journalist.
Nov 07, 2024
The Republican Party's capture of the U.S. Senate this week was made possible in part by massive spending from the nascent but increasingly influential cryptocurrency industry, which pumped more than $40 million into a successful effort to topple pro-worker progressive Sen. Sherrod Brown in favor of luxury car dealer Bernie Moreno.
Crypto industry spending helped make Ohio's closely watched Senate race the most expensive in the state's history, with Moreno's campaign boosted by around $40.1 million from the super PAC Defend American Jobs—part of what OpenSecrets described as the "triad" of allied pro-crypto groups pouring cash into the 2024 election.
The Washington Postnoted that Moreno "founded a blockchain firm called Ownum in 2018" and "has long immersed himself in blockchain technology, a registry of ownership that essentially underpins all cryptocurrency."
A spokesman for Fairshake, another member of the crypto PAC triad, took credit for Moreno's victory in a statement after the election was called in the Republican's favor and condemned Brown's
support for regulating the industry. Fairshake received tens of millions of dollars in donations from the cryptocurrency exchange giant Coinbase—some of which may have been illegal spending, according to the watchdog group Public Citizen, given that the company is a federal contractor.
"Sherrod Brown was a top opponent of cryptocurrency and thanks to our efforts, he will be leaving the Senate," said Fairshake's Josh Vlasto. "Senator-elect Moreno's come-from-behind win shows that Ohio voters want a leader who prioritizes innovation."
Crypto executive Tyler Winklevoss boasted in a social media post, "The crypto army is striking!"
"Sherrod Brown—crypto public enemy, Elizabeth Warren co-conspirator, and Gary Gensler crony—was just ousted by Bernie Moreno for Ohio Senate," wrote Winklevoss, the co-founder of Gemini.
Labor reporter Steven Greenhouse wrote Wednesday that it is "obscene" that Brown lost his seat because "the billionaire-backed crypto industry donated $40 million to his right-wing opponent."
"Sherrod Brown is one of the most pro-worker, pro-middle-class members of the U.S. Senate," Greenhouse added. "He truly fights for workers."
"The strategy was a brazen attempt to buy influence while keeping the public unaware of what they were supporting."
While the Ohio Senate contest was "the biggest single target of crypto money this cycle," as CNBCput it, the industry spread its money widely, backing both Republicans and Democrats in races across the country—underscoring its attempt to gain influence over future regulatory fights in Congress.
Overall, crypto groups spent more than $130 million in support of candidates for federal office this cycle. A tracker created by the Stand With Crypto Alliance estimates that 263 "pro-crypto candidates" were elected to the House and 18 to the Senate in Tuesday's contest.
Former President Donald Trump's victory over Vice President Kamala Harris was also seen as a win for the industry, with Bitcoin's price
spiking to a new all-time high on Wednesday. During his campaign, Trump vowed to make the U.S. "the crypto capital of the planet."
"Tonight the crypto voter has spoken decisively—across party lines and in key races across the country," gushed Brian Armstrong, the CEO of Coinbase. "Americans disproportionately care about crypto and want clear rules of the road for digital assets. We look forward to working with the new Congress to deliver it."
But one critic, Better Markets president Dennis Kelleher, cast doubt on the industry's self-serving narrative that the 2024 results amounted to a ringing endorsement of cryptocurrency.
In an op-ed for the San Francisco Chronicle on Thursday, Kelleher pointed out that pro-crypto PACs adopted "generic anodyne names" and bankrolled ads that didn't even mention cryptocurrency.
"It's as if Ford ran an ad campaign and never mentioned its cars," Kelleher wrote. "The strategy was a brazen attempt to buy influence while keeping the public unaware of what they were supporting. This way, the industry can claim the now-elected officials they backed have a mandate from the public to support crypto interests—even though they don't."
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FEC Accused of Sleeping at the Wheel as Crypto Giant Pumps Tens of Millions Into 2024 Race
"The time to hold campaign finance violators accountable is now—not after illegal election spending has corrupted our democracy," said the research director of Public Citizen.
Oct 31, 2024
The progressive watchdog group Public Citizen accused the U.S. Federal Election Commission of abdicating its responsibility by failing to act in the face of "illegal" election spending by the cryptocurrency exchange giant Coinbase, a federal contractor.
Public Citizen noted in a statement Thursday that "federal law bars campaign contributions to political parties, committees, or candidates from federal contractors."
The group's statement came a day after Brian Armstrong, the CEO of Coinbase, pledged that his company would pump another $25 million into Fairshake PAC, a super PAC dedicated to electing candidates supportive of the crypto industry, which has spent big to influence the outcome of the 2024 elections. Fairshake has spent roughly the same amount of money supporting Democratic and Republican candidates, reflecting the extent to which both parties have sought to court the still-nascent crypto industry.
According to Public Citizen, Armstrong's pledge brought Coinbase's total 2024 election spending above $76 million. In August, Public Citizen filed a complaint with the FEC arguing that a portion of Coinbase's spending appears to be unlawful due to the company's multimillion-dollar contract with the U.S. Marshals Service.
"Coinbase has spent more than $50 million in what appears to be illegal campaign contributions from a federal contractor to attack candidates who might stand up to Big Crypto; meanwhile, the FEC is snoozing through the election," Rick Claypool, Public Citizen's research director, said Thursday.
"The time to hold campaign finance violators accountable is now—not after illegal election spending has corrupted our democracy," Claypool added.
The FEC is currently chaired by Sean Cooksey, a Republican appointed by former president and GOP nominee Donald Trump. Evenly divided between three Democrats and three Republicans, the agency has faced backlash for refusing to take action to stem the proliferation of AI-generated deepfakes and illegal campaign spending.
What's more, as The New York Timesreported earlier this year, the agency has moved aggressively in recent months to weaken already-inadequate constraints on political spending.
"One decision this spring that is already reshaping the 2024 presidential race allowed super PACs and campaigns for the first time to work together to plan and execute costly door-to-door canvassing operations," the Times noted.
Additionally, the commission "decided that a wealthy donor could put money into a trust that then could distribute donations to campaigns—while keeping the original source anonymous," the Times reported.
This year's federal election cycle is on pace to be the most expensive in U.S. history, according to OpenSecrets. An analysis released earlier this week by Americans for Tax Fairness found that billionaire families have pumped nearly $2 billion into federal elections so far—likely a significant underestimate, given that the sum excludes untraceable dark money.
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