Cryptocurrency companies have ramped up their political spending in the United States, contributing over $134 million to the 2024 election. This surge in financial influence has raised concerns about regulatory rollbacks and corporate accountability. The Center for Political Accountability (CPA), a non-profit advocating for corporate political transparency, warns of the “profound risks” posed by unchecked crypto donations.
Following Donald Trump’s return to power, major crypto firms, including Kraken and Coinbase, donated $1 million each to his inaugural fund. Shortly after, the Securities and Exchange Commission (SEC) dropped lawsuits against both companies—cases originally filed under the Biden administration for alleged violations of securities laws. This sequence of events suggests a strong correlation between political contributions and regulatory leniency.
Deregulation Under Trump’s Leadership
One of Trump’s first moves upon re-entering office was reshaping the SEC. Gary Gensler, a staunch crypto regulator, was swiftly removed, and Caroline Crenshaw, another crypto critic, was replaced. These changes indicate a strategic shift toward deregulation, aligning with Trump’s vision of making the U.S. the “Crypto Capital of the World.”
In a bold move, Trump signed an executive order establishing a “Crypto Strategic Reserve.” He claims this initiative will support the industry after what he calls “corrupt attacks” by the Biden administration. The rapid policy shifts have emboldened crypto investors but have also sparked fears about the lack of oversight in a historically volatile sector.
The Risk of Unchecked Crypto Influence
Crypto’s deep involvement in politics extends beyond donations. The CPA report highlights key election outcomes where crypto funding played a decisive role. Candidates opposing crypto-friendly policies, such as Democrat Sherrod Brown, faced significant opposition-funded campaigns. Meanwhile, figures more open to crypto, such as Adam Schiff, benefited from industry-backed support.
The appointment of David Sacks as the new “crypto czar” has further raised eyebrows. Sacks, a known crypto investor, claims to have divested his personal holdings. However, his investment firm could still profit from government-backed crypto purchases, fueling concerns of conflicts of interest.
Lessons from Argentina’s Crypto Scandal
The CPA report warns that the U.S. should take cues from Argentina, where President Javier Milei promoted a cryptocurrency called $Libra, which later collapsed, wiping out $4.6 billion in value. The fiasco led to over 100 fraud complaints and a judicial investigation into Milei’s involvement.
Trump’s aggressive push for crypto, despite minimal understanding of its risks, mirrors Milei’s approach. Experts caution that endorsing crypto at a national level without sufficient safeguards could expose consumers to significant financial losses.
