Crypto Is Spending Millions to Sway the US Election

Paris Marx: Molly, welcome back to Tech Won't Save Us. Molly White: Thanks for having me. PM: Absolutely. It's always great to chat with you. In the past, we're usually talking about Web3 is Going Just Great (https://www.web3isgoinggreat.com/) and what you've been finding as you've been following this crypto industry. You're still looking at crypto, of course, but you have a new project called Follow the Crypto (https://www.followthecrypto.org/). Can you tell us what that is and why you decided to get it started? MW: So, Follow the Crypto is really just giving a view into the crypto industry is spending on the 2024 election cycle in the United States. I started it when I was doing my usual crypto research and I was starting to hear a lot about donations to political causes where Coinbase was announcing: Oh, we just donated $5 million, $15 million to these Super PACs. And the numbers were really starting to add up, I noticed. So, I started digging into it, the FEC (Federal Elections Commission), in the United States offers a pretty transparent view into election spending and fundraising. So, I was digging around, but I wasn't quite getting the clarity of information that I wanted just pawing through these FEC filings. So, I wanted more transparency into it for myself. And then I figured: Well if I want it, other people probably want it. And so I decided to make a website out of it where people could just go and look at how much they're spending, how much these crypto-focused Super PACs are raising, which elections they are trying to influence and things like that. PM: It's a really cool website. It's really straightforward, to the point, here is what you need to know about where all this money is coming from and what it's doing. You mentioned Super PACs there. Even for some Americans, but certainly for non-Americans, they might not really know what a Super PAC is. Can you give us an idea of that? MW: So, Super PACs are kind of a special type of political committee in the United States where they are at least nominally independent from any specific candidate. And they're really not allowed to coordinate with candidates on political spending in the same way that specific candidates fundraising committees are. What really sets them apart is there are really no limits on contributions to Super PACs. So, while individuals are limited to only giving a couple of thousand dollars to any individual candidate directly, people and companies can contribute millions of dollars to Super PACs, which then spend the money on various candidates however they see fit. PM: Fundraising and getting door knocking efforts going, all those sorts of things? From reading your website, it looks like Fairshake is the biggest, crypto-focused PAC out there. Can you tell us what that PAC is? What it's trying to advocate for? And are there other big ones as well? Or is that the main one? MW: So, Fairshake is definitely, by far, the largest crypto-focused Super PAC. And I mean, it's sort of what it says on the tin, but they're really trying to support candidates who. Take a friendly view to the cryptocurrency industry, as far as lighter touch regulations, supporting bills that the industry has championed. And then they're also opposing candidates that they view to be hostile to the industry in terms of supporting stricter regulations or opposing those bills that the industry is, has wanted to have passed. And Fairshake is certainly the largest, crypto-focused Super PAC in terms of the money that they've raised. They've raised over $160 million at this point, there are two other political action committees that are adjacent to Fairshake and they're called defend American jobs and protect progress. Notably, none of them have anything to do with crypto in the name, which I think is actually pretty notable. Defend American Jobs is dedicated to supporting conservative candidates. Protect Progress is the progressive counterpart of that. But actually, I think it's somewhat interesting to note that they're basically all the same group. Fairshake is very closely connected to both of those Super PACs and has funneled money into both of those Super PACs. And so, my observation from watching the spending coming out of these committees is that Fairshake will donate to candidates that are a little bit more center of the road. And then if there is a very progressive or a very conservative candidate, the contributions will often come out of the other Super PACs. My guess is to sort of obfuscate to some extent the type of spending that's happening here, but they are effectively the same group. PM: That's interesting. When I think about defending American jobs, the first thing that comes to mind is giving lighter regulation to cryptocurrency companies. I don't know about you \[laughs\]. MW: And Protecting Progress, that's the same, and giving a Fairshake. It's certainly not uncommon for Super PACs to have names like this. You'll often see any Super PAC has just a very vague name and then you'll have to go look up, so what are they actually doing? And the crypto ones have certainly followed that template. But, I think it's actually part of a broader pattern where a lot of these Super PACs, although the story out of the industry is that cryptocurrency and crypto policy is a major voter issue where people are very concerned about the future of crypto policy. They don't seem to actually really believe the story that they're telling because they are often papering over their own connections to crypto with these very benign names that are completely vague, but also the ads that they're running in these campaigns don't tend to mention cryptocurrency at all. They often don't even mention technology or economic policy, even they just sort of parrot whatever they think might help the particular candidate without going into the crypto issue. PM: Interesting. It's like: We'll get this person who we know is going to help us, but let's not talk very much about the crypto side of things until we actually get them in office and they can do what they're going to do to try to help us out. MW: It is interesting because, like I said, they've been really pushing this story that crypto is a big voter issue, but I think they understand that a lot of people are actually turned off by crypto and they would see a candidate who's often not particularly interested in the crypto topic, start repeating lines about crypto, and they don't tend to react well to that. There have been a couple of campaigns across the country where a candidate has taken the crypto angle and gotten support from these Super PACs and their constituents have taken it to mean they're selling out that they're accepting billionaire money from out of state. And so I think that's largely why the Super PACs have been careful to not really stress that connection. PM: And those constituents wouldn't be wrong, really. MW: Right, exactly. PM: Have you noticed as you're seeing this money flow, are there particular races or particular candidates that you see the crypto industry particularly focused on either having win or having defeated? MW: Yes. There have been a handful of races that they've spent quite a lot of money on and so far, it's mostly been congressional primaries; those are just wrapping up. Now we're getting to the tail end of that. And so I think we're going to start seeing more spending going towards general elections. But so far we've seen a huge amount of spending to oppose Katie Porter in the California Senate race. Fairshake spent around $10 million to oppose her. And she was defeated in that primary. There were other major opposition spending efforts against Jamal Bowman, Cori Bush, a handful of politicians along those lines, which also were successful and then they have been doing a fair bit of support spending as well, both towards Democrats and Republicans, but with a bit of a Republican bent, I would say, and those races have had some mixed results. But again, mostly success. I would say supporting candidates through the primaries. And then, like I said, we'll start to see the general election shake out pretty soon. PM: That's really interesting. And I guess not surprising that it's some of the more progressive ones in particular, the Katie Porters, Jamal Bowman, Cori Bush, that they're particularly targeting because I'm sure that generally these are people who are quite opposed to cryptocurrency, basically the light, loose crypto regulations that the industry would want to see. And I believe if I remember correctly, Katie Porter was quite involved with a lot more kind of financial issues and things like that. So it's maybe not particularly surprising that that's one of the ones that they really went after. MW: And Katie Porter was also, broadly, seen to be very close with Elizabeth Warren, who is kind of public enemy number one in the crypto world. And so I think that really drove a lot of the spending because Katie Porter, she certainly has had a long history of financial topics that she's been invested in, but she's never been super hawkish on crypto specifically. And so it was a little bit unusual at first, I was looking at it and I was like: Why do they care so much about Katie Porter? And then it became clear that it was really this allyship with Elizabeth Warren that seemed to be a major issue. And we've seen that in a couple of other races as well, where people who are associated with Warren have been on the losing end, at least spending wise. PM: That's fascinating. And I guess, again, not particularly surprising. Is the crypto industry pushing any particular bills or things like that? Or are they really just trying to get people who they know would be more open to the types of things that they would want to get? And then moving forward, they're going to try to get them to pass specific regulations or whatnot that they're Would be beneficial to the industry. MW: So there've been a handful of crypto related bills that have been in Congress over the past couple of years that they have wanted to see pass. It seems like a lot of the decisions that they're making on who to support, at least when it comes to incumbent candidates who are running for reelection, whether those candidates supported those bills. And so, there's a website that Coinbase's Stand with Crypto advocacy group created that gives politicians a report card basically on how friendly or anti-crypto they are. And a lot of it comes down to, okay, did they vote for FIT21, which is a very pro-crypto bill that the industry has supported. SAB 121 is an SEC bulletin, basically, that the House tried to overturn. And ultimately, they were not successful in doing that, but the voting record on that is pretty good. Being used now to determine who's pro crypto, who's anti crypto. So they, I think, have kind of a grudge against people who maybe didn't support the bills that they wanted to see pass. FIT21 is still going through Congress, but they would love to see that pass for sure. PM: I guess one of the bigger questions I have, and there are a number of things I still want to jump off on based on what you were talking about there, but how is it that, in 2024, the crypto industry is still such a big player in campaign finance and kind of shaping these different races that are playing out across the country. Because I think for the average person who's thinking about it or who's been paying attention to the crypto industry or the tech industry more broadly, we had this bubble a couple of years ago that really started to implode in the latter half of 2021 continuing through 2022. And, of course, we more recently saw Sam Bankman Fried go to prison for fraud and it looked like this industry was kind of buttoned up. It was done; we moved on to AI. How is it that crypto is still a thing and is still spending so much money in these electoral races? MW: Well, I mean, I was saying this during the crash of '22, I thought the reports of crypto's death were greatly exaggerated. Crypto tends to go in cycles like this, where there'll be a huge boom and then things just absolutely implode. And it looks like things are over, crypto's done, Bitcoin's dead, whatever it might be. And certainly headlines will often say things like that, but inevitably it seems to come back, which is really why I've said that. I do think that without strong regulation, the industry will continue to go through these cycles that tend to have really damaging effects on people. Another thing that I think is really important to note is that a lot of people were wiped out during the crypto crash. Everyday people had been convinced of this story that Bitcoin is a great way to grow your wealth or protect your wealth or whatever the story might be. PM: Save for retirement even. I remember some particular podcasters reading those advertisements \[both laugh\]. MW: I haven't heard one of those ads in a while! There are all these stories going around and a lot of the people who bought into that and who were like: Okay, I guess I have to do this to get the returns that I want or to stay up to date or to get in on the big tech investment were really wiped out by that. They lost a lot of money, but the companies often did not; it was not the companies that were really suffering here. Certainly there were companies in the crypto world that were dramatically overleveraged or doing really shady stuff. And they fell apart in, again, very dramatic ways, but the Coinbases of the world, they were just taking fees; they were skimming off the top here and the actual success or failure of the cryptocurrency sector didn't impact them as much as it did the everyday people who were holding crypto. And so they were able to weather the storm, often with relatively good revenue, and they now have substantial amount of money to burn on politics, especially because a lot of these regulations, are viewed by the industry as very existential. Will Coinbase in its current form be able to continue to exist if a new group of legislators comes in that's more consumer protection focused, more interested in cracking down on this type of thing? Or conversely, could they expand their business? Could they do more of the types of things that they've been wanting to do, but have been afraid to do because of the regulatory status of the industry, if they're able to install politicians who are willing to roll back some of those protections? PM: That makes sense. It still is surprising to see them deploying so much money. In races where Fairshake is, I believe your website says it's the PAC with the most money that it has raised this cycle. MW: It's a little bit hard to get the precise number on that because there are some issues with the FEC data. But when you look at all Super PACs, at least, and you exclude some of the other types of committees, fairshake is somewhere between number one and maybe number four in terms of overall funds raised this cycle. And that's going up against the Trump Super PACs, the Senate majority PAC, some of these huge, huge Super PACs. So it's really, shocking to see that. That was partly why I started the site — I was really surprised to see that amount of money coming from an industry that's relatively small when you compare it to other industries that spend heavily on politics in the United States. You look at the pharma industry, the energy industries — they're trillions of dollar industries. And then there's little crypto, but it's pouring vast amounts of money into campaign spending now, which is partly why I started paying attention. PM: It is wild to see it and I'm not surprised that you picked up on that and were like: What is going on here? But you mentioned Coinbase a few times there and I think it's probably a good idea that we talk about that company, in particular, because as you were looking into this you found that they were potentially doing some things that seemed like they were in violation of campaign finance laws, if I'm getting that right. Do you want to talk to us a bit about what you found about Coinbase and why that's concerning? MW: Sure. So, Coinbase has been one of the biggest contributors to these Super PACs. They've been incredibly heavily involved in these lobbying efforts, both financially and in terms of trying to rally their customer base to support politicians directly. And so, they over the period of the last two years or so have spent almost $50 million on Fairshake specifically, this one major Super PAC. And as I was going through the contributions to that Super PAC, I also was aware of the fact that Coinbase was recently selected as a federal contractor that is in charge of custodying the cryptocurrency that is seized by law enforcement in when they bust one of the Silk Road hackers or something like that, they seize all these Bitcoins or some other crypto tokens and they hold on to them. PM: There's a crazy amount of Bitcoin being held by the US government, isn't there? MW: The US government is one of the largest Bitcoin holders out there, which is hilarious in some ways and terrifying in others. So they have this huge stash of Bitcoin that they're hanging on to. And obviously there are security issues there. My other website shows that crypto wallets are hacked all the time, and so they have to have some way of holding on to this, and they recently decided to outsource that to one of these crypto custody firms, and they ended up selecting Coinbase for the job. So, Coinbase now is controlling or custodying a lot of this cryptocurrency for the US Marshals. They also are helping them sell it off whenever those assets are formally forfeited. It used to be that the government would sell them at auction, and it was this whole big thing, and now they're doing it through Coinbase. It's just a little bit less of a big splash every time it happens. But so, basically Coinbase was awarded this federal contract in July, but going through these contributions that they were making to Fairshake, one of them stood out. They made a $25 million contribution to Fairshake, and when you actually look at the laws around campaign finance and campaign contributions from companies that have federal government contracts, there is a prohibition where they are not allowed to contribute to candidates, to political campaigns, anything of that sort, during the period where they are either negotiating the contract or they're carrying out the contract. And when you actually look at the contract that Coinbase was applying for, they began those negotiations before the $25 million contribution was made, meaning that that contribution was prohibited under campaign finance laws that are really focused at avoiding what's called pay-to-play, which is where companies that are pursuing these government contracts make contributions, potentially in sort of a quid pro quo manner where they then get these very lucrative government contracts. And in this case, the contract is $32 million. So, certainly not a small amount of money for Coinbase. And so, I spoke with some other folks who are certainly a lot more familiar with campaign finance law than I am and was like: Hey, am I crazy here? Am I missing something? And they basically said: No, this does look like a violation; you should really report this to the FEC. And so I ended up teaming up with Public Citizen, which is an advocacy group that does a fair bit of this type of stuff, and we submitted a complaint to the FEC a couple of weeks ago now, and we're sort of awaiting news in that department. PM: And I'm sure Coinbase has reacted totally normally to that filing, right? MW: Very professional, normal stuff coming out of Coinbase \[laughs\]. So, when I was first researching this, I was intending to write about it. And so I reached out to Coinbase for comment as you are supposed to do. And I also reached out to Fairshake, to give everyone a chance to explain what was going on really. And Coinbase did respond, although, I'd asked them four questions and they didn't respond to the questions. They just said: Coinbase follows all the laws, basically. It was the response. I was like: Oh, well, in that case. PM: Phrased just like that, I'm sure. MW: I was like: Oh, well, I guess there's nothing here. I'll move on. PM: Yeah \[laughs\]. MW: So, I put that in my piece and I published it and then shortly after I published the piece, the Chief Legal Officer of Coinbase, Paul Graywall, decided to respond, not to me, but by tweeting about it as they are are want to do and basically said she has no idea what she's talking about; we are not a federal government contractor, despite this federal government contract that you can see on the website that lists federal government contracts. He had this theory, basically, which is that the way that this contract has been structured, the money that is paying Coinbase for their services is coming out of the pool of seized assets. And so the theory that Paul Graywall had is, well, because of that, these are not funds appropriated by Congress, which is a weird in the weeds thing, but it comes down to the fact that in the regulations, that is a part of how they define federal government contractor. So, they have a contract and they're being paid with funds appropriated by the Congress. And so that was sort of the theory is like: Okay, we're not a contractor. So it's totally fine. The problem is that that doesn't actually seem to be well supported by the law. Again, this is sort of above my pay grade as far as my own expertise, but Public Citizen has lawyers and other experts who are very familiar with campaign finance law who basically looked at it and they determined that the Asset Forfeiture Fund, this pool of cryptocurrency and other assets, is a congressional appropriation, and it is the Congress who authorizes the Department of Justice and the US Marshals to spend it on contracts like this. And so Coinbase is very much a federal contractor and they are prohibited from making these contributions. So, it'll come down to the FEC ultimately to make that determination and to decide whether or not to pursue an enforcement action. But Coinbase certainly has vehemently denied the allegations in a very public way that certainly seemed intended to sick people on me a little bit. Graywall was retweeting his own tweets to try to stir up the Coinbase supporters to come and call me an idiot and that kind of thing, which was very irritating, but definitely par for the course from that company, unfortunately. PM: I'm sure by now, I don't know if you'd be publicly an enemy number one, but certainly near the top of their list, right? They're like: Oh my God, Molly's doing something about us again. And they're losing their mind. MW: Just sniffing around! PM: I think it's just like Uber can't be a transportation company because it's a tech company. Maybe it's more of this tech exceptionalism; we can't be a federal contractor because we're a tech company, we're different. MW: No, the theories are definitely really strange. And some of the comments that I've been seeing are just very bizarre. Well, how could anyone take custody of government crypto if this is a prohibition that applies? And it's like: Well, they would have to stop making campaign contributions like every other federal contractor does. PM: They could have even timed it a little bit better to send that $25 million before they started contracting. MW: And like I said, they've made around $50 million in total in contributions. They were certainly able to do this previously, but they decided to just completely ignore the prohibition that applies to them. And, it was very strange. And Graywall accused me of implying that they were partisan, because in addition to the $25 million contribution to Fairshake, there was also a $500,000 contribution they made to, I think it was, the House Republicans. It might've been the Senate Republicans. I don't remember off the top of my head. And that was also made during this prohibited time period. So, we mentioned it in the complaint and I mentioned it in my reporting. And Graywall was like: How dare you imply that we are contributing unequally to various candidates? Look, we've made these $500,000 contributions to both House and Senate, Republicans and Democrats. And he was all mad that we were implying that they were Republican donors, which was bizarre because a) we didn't make any allegations like that. I didn't imply that Coinbase was donating unequally to Republicans because he's right. They have made roughly equivalent donations to both parties. But also the reason that I only mentioned one of them was because only one of them was made during the prohibited time period. Of course, I didn't go into detail on the other contributions that they've made because they were permitted. I'm not going to go complain to the FEC about something they're allowed to do just because I don't like it. PM: This is about the illegal stuff that they don't want to admit is illegal. MW: It was this weird, I can't believe you're implying this thing. And it's like: No, I'm implying that you broke the law, which you did. PM: It's a good deflection though, you know? MW: I think really what it comes down to is really just trying to shift the focus away from the violation and instead making it about: Oh, Molly is so partisan, and there are other things around there's no barrier to filing these complaints, suggesting I have no idea what I'm talking about. I mean, he's not wrong, but I do know how to talk to people who do know what they're talking about. PM: Public Citizen has lawyers. They know what they're doing. MW: And they've been involved in campaign finance advocacy for a long time. This is not the first FEC complaint they filed. They have experts on their staff who do this stuff all the time. PM: It is fascinating that you were able to find this and basically catch them in it. I'm sure they expected nobody to pay attention to that if they knew what they were doing at all but, I'll be interested to watch to see how it all plays out. Is there a timeline on something like that? Or is that the kind of thing that where it can take a while to work its way through? MW: There is a little bit of a timeline. First, where the FEC, they have acknowledged the complaint that we submitted and they have to basically check that it's a valid complaint and that we actually allege something that is a violation. And they've done that and, accepted the complaint in that sense, then they reach out to Coinbase for a response. And I think Coinbase has 15 days to respond or something . And then after that, they take a vote. The commission takes a vote on whether or not there's reason to believe that a violation occurred at that point, either they dismiss the complaint because they don't believe a violation has occurred or they open an investigation. And once that happens, the timeline sort of becomes very vague as they can spend a lot of time communicating with Coinbase, potentially doing more investigative work around what actually happened. And some FEC complaints take years, unfortunately, to resolve. But we should at least know fairly soon if they decide to open the investigation. PM: You've mentioned a few times the partisan nature of donations and the fact that donations have been going to both sides, but it's weighted a little differently depending on how you look overall. Sure, Coinbase made might have made donations to Republicans and to Democrats. But if you look overall, it seems, based on looking at your website, that there's a lot more money going into supporting Republicans properly. And there's certainly money going to supporting Democrats, but there's also a lot of money going to opposing Democrats specifically. Can you talk about the partisan nature of donations and how you're seeing that play out and, and whether it suggests any kind of shift in how the crypto industry associates itself with one party or another? MW: So there has been somewhat more spending going towards supporting Republicans, but it's not completely blowing out the Democrats. It's like $17.4 million supporting Republicans to about $13.9 million supporting Democrats at last count, at least. And so, there's a little bit more going to the Republicans. The biggest difference is in terms of the opposition spending, as you mentioned. So, they've spent almost $14 million to oppose Democrats versus a couple hundred thousand to oppose Republicans. PM: And is that particularly blown out the opposition stuff just because of how much they spend on Katie Porter specifically? MW: That's a major part of it. $10 million to oppose Katie Porter out of the $13.8 million in opposition spending. And then you add in another $2 million to oppose Jamal Bowman, another $1.4 to oppose Cori Bush, and that's basically it. But if you look at those races, it's hard to say specifically that they are opposing Democrats because they're intending for Republicans to be installed in those races. In some of these races, Jamal Bowman, for example, the likelihood of a Republican winning that district in the general is infinitesimal. There's really no likelihood of that happening. So it's hard to say necessarily that they are supporting Republicans when they make those contributions, but they are really spending to oppose those Democrats versus to support their opponents, which is notable in these cases. With Jamal Bowman, the goal really was to get him out of office and who cares who comes in next, they're going to be better than Jamal Bowman was really the feeling in that race. And that's not the case across the board. I think with Katie Porter, they've got some allies that could potentially come in. Adam Schiff has been somewhat supportive of the cryptocurrency industry. And so they're certainly hoping to see him installed even as a Democrat. I think broadly speaking, we've seen a little bit more support to the Republicans, but I think what this signals really is that crypto has historically in the US been something that Republicans have supported more than the Democrats. There have been a couple of Democrats or independents who have been vocally supportive of crypto, but most of it's coming from the Republican side of the aisle. But I think the cryptocurrency industry has realized that just getting the Republicans on board isn't going to be enough to do what they want to do. That they can't rely only on that one party and that they really need to try to get as many people as possible on board with the crypto agenda in order to do the things that they want to do. And I think that's why we've seen so much of the spending going towards Democrats is there's this feeling that if we don't get some of these Dems on board, we're never going to get past some of these barriers for example, the SAB 121 bill that they were hoping to pass that would have overturned that SEC policy that they are very opposed to, it was vetoed by Biden. And so then they needed to get this sort of super majority to actually override that veto. And they were unable to do that. And so that's the type of thing where you can't just rely on a Republican. Democrats split where all the Republicans support it and all the Democrats oppose because you can't override a veto or something like that. So I think a big part of it is that there's really been this strong push, at least from some parts of the cryptocurrency industry, to court Democratic Congress people. And even in the presidential campaigns, we're starting to see a lot of that as well, where people in the crypto world are trying to get Kamala and her campaign on board with crypto policy and various initiatives that they're starting to push. PM: That's really interesting too, even to think about, it seemed like a few weeks ago when I was talking to Jacob Silverman that there was a lot of momentum behind Trump and the Republicans, they had been leading Biden in the polls for a while. That lead was growing, especially after the poor debate performance that Biden had against Trump. And then of course, in the immediate aftermath of the assassination attempt against Trump, it was like: Okay, okay; the Republicans are going to sweep; they have so much momentum now. Things are going so good, but then, Trump had announced Vance is the running mate and that was a disaster. And Biden finally stepped back and allowed Kamala to step into the candidate position and now they have Tim Walz. And it seems like the Democrats have this momentum that it was hard to even imagine a month ago. And so if you're thinking about trying to get crypto policy through, it's increasingly looking like you're probably going to need some more Democrat support than you were expecting to need, even if the Republicans were going to win. But now with how things seem to be shifting, trying to get Democrats on side seems like it's probably even of greater importance than it was a few weeks ago. MW: There was really this moment, I think, of euphoria within the cryptocurrency world where Trump seemed like he's just going to sweep Biden in the presidential campaign and everything was going to go their way. Around that time, Trump had come out and spoken positively about Bitcoin. He'd agreed to speak at this Bitcoin conference as a headline speaker. And the crypto world was absolutely euphoric about it. And they were gloating about how crypto was suddenly going to become this big portion of national policy under Trump. A lot of people in the sort of executive ranks of the crypto industry came out with this wholehearted support of Trump, donated millions of dollars. And then, things took a very sudden turn when Biden stepped down, Kamala Harris stepped stepped in, Tim Walz was chosen as the VP, Vance was chosen as this sort of bizarre running mate for Trump. And now it seems like the crypto industry is sort of on its back foot going: Oh, shoot, we were a little too enthusiastic there and we may have burned some bridges that we may now really need to start mending because if Trump is not a shoe-in for the presidency and we've just gone all in behind him, what is left if Harris is ultimately elected. And so now we're starting to see efforts coming out of the industry to speak with the Harris campaign to try to court various Democratic lawmakers to meet with people in the Biden administration who are involved in crypto policy. There was this very sudden shift; the strategy first was let's just beat them, get them out of office, replace them with our own guys. Trump will come in and totally replace all of the regulatory folks with people who are friendly to crypto. He said as much at the Bitcoin conference. And now there's this push of like: Oh, no, we need to make sure that if Harris is elected, we haven't completely alienated everyone in her administration. PM: That's fascinating. And I think that is happening beyond the crypto industry in a lot more of Silicon Valley, because it feels like a lot of them kind of bought in at the peak and then everything crashed after that. And they were like: Oh, man, what have I done? A lot of them have gone pretty quiet since then, except maybe Elon Musk. MW: I saw a really great tweet that was a headline about the Andreessen Horowitz people who decided to support Trump right as things took a turn. And it was like: Wow, that's like buying the peak, buying the top. PM: Usually they're trying to sell at that moment, but they bought right in. You talked about Trump. I want to talk about how the crypto industry is approaching both candidates, and you talked about how Trump spoke at the Bitcoin conference. Can you give us an idea of the types of things that he was saying and how much it felt like he really understood the issue of crypto or was really just kind of repeating what crypto insiders had been telling him or got his policy team to put together or something. Did you have a vibe of that? MW: So he spoke at the Bitcoin 2024 conference, which is the biggest conference in at least in the United States. PM: He was like the headline act? MW: Yes, he was the number one guy. He was the talk of the whole conference. It was really a very political conference this year. Trump was speaking, but they also had RFK Jr.; they had Vivek Ramaswamy. They had a couple of other Congress people. There was also Ro Khanna, who's a Democratic Congress person. He was the token Democrat there. So Trump gave this headline speech. It was very Trumpian, very rambling. He spoke about electric vehicles and Hillary Clinton and Biden. And, it was like a rally speech more than anything, but he obviously touched on Bitcoin and cryptocurrency more broadly. And you could definitely tell as he was speaking that there are these very obvious shifts where he goes from scripted to unscripted and back again. And he was really on script when it was the crypto talking points, which really led me to believe that it was his policy team, probably with input from people who know what sounds good to the Bitcoin community who are feeding him the lines that he needed to say about cryptocurrency. And it was pretty expected stuff about firing Gary Gensler, who's the chairman of the SEC. And I said earlier that Elizabeth Warren was public enemy number one, but she might be public enemy number two compared to Gary Gensler, because he's really seen as the enemy of crypto. PM: That sounds about right. MW: And there were other things that he mentioned. He said: I'm going to get rid of the regulators who hate your industry, and I'm going to install regulators who love your industry, because that's how regulators should be. RFK Jr. had spoken the day before and had made a big promise about establishing a strategic reserve of Bitcoin, which was very popular among Bitcoiners, as you might imagine. And so Trump, it looked like maybe there had been a last minute change to his speech where he also tried to say that but his was sort of a different version of it, where instead of going out and buying Bitcoin to establish a reserve, he started saying: Well, we're just going to keep all the Bitcoin that the Marshals sees pretty much. And that will be the strategic reserve, which wasn't as exciting as RFK has promised to go spend billions and billions of dollars on Bitcoin, but it certainly got some applause from the audience. So, it was kind of what you might expect from that kind of a speech, but certainly pandering to the Bitcoin crowd. It did seem when he was off script that he maybe isn't quite as much of an enthusiast as his team would like him to portray. He made a kind of a weird comment when he was talking about that strategic reserve where he mentioned that the Bitcoins in the US Marshals fund were stolen from you, the audience. Basically, this idea that those seized assets were sort of rightfully belong to the audience. And then he's like, we're going to keep them and make them into a strategic reserve. I'm like: Wouldn't you want to give them back if they were stolen? Like that doesn't seem quite like what you were leading up to. He signed off at the end. He said, "Thank you for having me. Have fun with your Bitcoin and your crypto and everything else you're playing with." That was a really dismissive, have fun with your little toys, silly people, give me millions of dollars, please. Bye. PM: I didn't watch the speech, but I did see that part and I got a good laugh at it. MW: It was really funny. I thought that was really funny. And then immediately after the appearance, he started selling Bitcoin sneakers, which were just gaudy and hideous and it seemed very transparently an attempt to empty the pockets of a lot of these Bitcoin billionaires who wanted to get on board with the next winning candidate. So, it seemed pretty transparent to me, but perhaps I'm a little biased on that. PM: I'm not really surprised by anything that you're saying there. That's kind of what I would expect that he's making an appearance, that he's been fed the talking points he needs to say, but otherwise he's just going to go on his rambling act that he usually does. I know that there was some frustration, anger that Kamala Harris wouldn't come to the Bitcoin conference. Do we have any idea of her stance on crypto and whether the industry has been successful at all in trying to get close to her campaign? MW: So right around the Bitcoin conference was when this whole shift happens and Harris had just taken on the role of presidential nominee and she was starting to gain some momentum. And so this sort of 'rah rah' Republican Trump; here's our next President thing took a bit of a shift, the organizer of the Bitcoin conference claimed two days before the conference was supposed to begin that we're in talks with the Harris campaign about her coming to speak at the conference. And I was like: That's weird. And then a day later, he was like: It didn't happen. Of course, she doesn't want to come. It would be terrible for her, totally trashed Harris to his adoring fans. To me, it seemed like a pretty transparent bluff. Maybe they sent an email and she acknowledged the email or something, but I don't think they were in serious talks. For one, it would have been one of her very first appearances as presidential nominee. And just the idea of her doing one campaign rally and then going to the Bitcoin conference is a weird way to start a campaign, especially as a Democrat. So I think that was really just a publicity stunt by the Bitcoin organizers. I don't suspect there were actually serious conversations happening. But there have been attempts to reach out to the campaign. There was a story in the Financial Times about how her campaign team was supposedly seeking a reset with the cryptocurrency industry. Again, it wasn't clear if that story was coming out of these crypto executives who reportedly met with her team or if it was coming from her team. So it may be a part of an attempt from the industry to portray things as being a little bit smoother between the industry and the democratic administration than they really are. But there have been some overtures, some democratic Congress people wrote a letter during the Bitcoin conference to the DNC urging them to take a friendlier stance. Again, that was certainly a publicity thing as much as anything. It was timed to happen during the Bitcoin conference; there was a roundtable recently that happened between some members of the Biden-Harris administration and cryptocurrency executives that supposedly didn't go very well from the reporting that I've heard. It sounds like the executives in that meeting were pretty hostile to the people who are there from the government end of things, which maybe wouldn't be my strategy. If I was trying to mend fences, but so there have been these attempts. Tonight, there's supposed to be a Crypto for Harris events to try to mimic some of these other Black women for Harris and Dudes for Harris and all that stuff. I'm very interested to see how that will go. But it seems tepid maybe at best and a lot of the hype about a supposed softening towards the crypto industry seems to be coming from that industry rather than from Harris and her campaign team. PM: And just to be clear, when you say tonight, that's August 14th. When we're recording not the date that you'll be listening to this, I feel like I have some concerns about the Harris campaign and its relationship to the tech industry, given that she is from Silicon Valley and has fundraised from them before, given that she has two Uber executives, one current, one former on her campaign team, and given that she hasn't made a strong defense of Lina Khan as some of these tech billionaires are calling for her to be removed. But I feel like when it comes to crypto policy, that's one of the areas where I'm not so concerned about her caving in to tech industry interests. I think that is something that we'll be watching to see how it progresses and how it develops, and as you're saying, how much the crypto industry is trying to show that they're trying to get in with the Harris campaign, even if there's not much of a receptive partner on the other side of those talks. But to start to wind up our conversation, I wanted to zoom out and ask about the crypto industry more broadly, right? Because I know that there has been reporting on the increase in crypto and Bitcoin prices, earlier this year. Obviously, there are still volatile fluctuations, as there always are, with the prices of those assets, or whatever we want to call them. But from what I've heard, there is not actually a lot of trading volume supporting those increases in the way that we saw a couple of years ago when supposedly Bitcoin and crypto are going to be the next big thing. How would you assess the state of the industry right now? We know that they're putting all this money into campaign finance and into trying to get laws that are favorable to them. And that there are some companies that are certainly doing well, like Coinbase, it seems. But it also feels like this industry is nothing like what it was a few years ago. How would you assess that? MW: It's been a bit of an interesting thing to watch because there was this period during 2020, 2021, where they had really managed to sell a narrative, I think about crypto being the future of technology and finance and all of these companies were like: Oh, we need to build our product on the blockchain and we need to release an NFT. And there was this sort of interest from that end of things as well as retail interest where people were like: Should I buy a Bored Ape? Do I need to get Bitcoin? Average everyday people, to o, were asking that question. And that's missing this time around. So, the prices have come back up somewhat from the lows of late 2022 and early 2023. We're back at what had previously been approaching the highest prices for Bitcoin. But it's been moving pretty sideways for a while. There hasn't been that leg up that you've seen in previous spikes. And I think it comes down to The lack of new money coming into the space to some extent where there just isn't that interest coming from people who don't hold Bitcoin, who aren't interested in the crypto space, because there isn't that much of a narrative around it. People are starting to realize within the crypto community that there is this strong tie between crypto prices and the macro environment. It used to be the story that: Oh, Bitcoin's a protection from the fluctuations of the stock market from inflation. It's a store of value, much like gold. There were these narratives like that. We're really seeing those fall apart as the stock market has been more volatile and crypto prices have been right along with it. It's becoming very clear that crypto is very similar to other high risk asset classes. And when there is uncertainty in financial markets, whether it be because of inflation, rate changes, or a new administration potentially coming in, people get out of Bitcoin; people get out of risky assets. And so the industry has been struggling with that to some extent. The new narrative, as much as there is one is really just like: Oh, Bitcoin is a financial instrument that you could add to your portfolio, that could be a part of your retirement or investment strategy; now you can buy Bitcoin ETFs or Ethereum ETFs. They were very excited about this. They were hoping this would open up vast new sources of money that were not previously buying Bitcoin. And there has been interest. I don't want to deny that people are buying Bitcoin ETFs and things like that, but it's not the type of interest that I think they had hoped that would have seen Bitcoin going to a hundred thousand dollars and beyond. So they're having a tough time right now, I think, in that sense where they just don't have the story anymore. People got really burned by the last boom and bust. I think people have short memories, but not that short. And I think a lot of people remember FTX. They remember Paris Hilton trying to shill a Bored Ape on Jimmy Fallon and how cringe that was. They remember all these companies saying: Oh, we're gonna put our project on the blockchain and then sort of quietly discontinuing those efforts. And so things are a little stagnant right now in the crypto world. And certainly that happens from time to time. It's not like: Oh, this is the death rattle of the crypto industry. I don't think that it's appropriate to make that type of prediction at this point, but it's certainly, it doesn't have the type of energy that it had a couple of years ago. I think, to some extent, I wonder if the crypto industry is even self-aware of that. It seems like they're a little high on their own supply right now. And they've really bought their own narrative that, this is the future and we're this powerful force that's influencing politics and all this kind of stuff. But if you speak to a normal person who's not online 24/7, who's not on crypto Twitter, who is not going to the Bitcoin 2024 conference, they're like: Crypto? Isn't that that thing that exploded a year or two ago? What are you talking about that? They're, supposedly, changing election outcomes and, people are voting based on their crypto beliefs. It's just not true, and it's a story and that's all it is, I think. PM: No, I definitely feel that, and I feel like if you talk to people who are not paying attention to tech or to crypto all the time, like we are, their association with crypto is like: Isn't that over? Didn't that guy go to jail for fraud? Isn't that the weird thing that people were doing a few years ago? It's not something that is stuck around in the collective consciousness because now AI is the next big thing, of course. Molly, it's always wonderful to talk to you and to figure out what is still happening in the crypto industry when we assume that or maybe even hope that it has actually died, but no, it always resurrects itself like a zombie. Great to talk to you as always. Thanks so much, Molly. MW: Thank you for having me.