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Harris escalates her courtship of crypto

Updated Sep 26, 2024, 12:31pm EDT
politicsNorth America
Vice President Kamala Harris
Jim Vondruska/Reuters
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The Scoop

Kamala Harris isn’t just talking about a friendlier approach to cryptocurrency than President Joe Biden. She’s already dispatching aides to court well-heeled crypto investors and their Democratic allies in Congress.

Harris’s emissaries to the crypto sector include Brian Nelson and Louisa Terrell, according to two people familiar with the outreach. The Harris campaign advisers have solicited feedback from crypto executives as well as Hill Democrats seeking to steer the vice president away from the Biden administration’s crackdown on a resurgent sector that’s lavishing cash on the 2024 election.

Pro-crypto Rep. Wiley Nickel, D-N.C., has been in touch with Harris’ team on the topic and organized two briefings in recent weeks for fellow House Democrats interested in learning more about digital currencies.

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“You’re going to see a much more balanced approach from President Harris on this issue,” Nickel told Semafor, adding he’d spoken to her advisers about blockchain technology and other ways to promote decentralized ownership of digital assets.

Harris debuted her newly crypto-coded message in remarks to Wall Street donors this past weekend, 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.

Pro-crypto Democrats have even enlisted a celebrity Harris backer to marshal support for any cryptocurrency bill that would create industry-backed regulatory standards: billionaire investor Mark Cuban. He told Semafor that he plans 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.

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Some prominent Democrats are also tempering their initial skepticism of crypto assets. Sen. Jon Tester of Montana, a member of the Senate Banking panel, derided digital tokens as “bullshit” after the FTX collapse in late 2022.

“I was never an opponent,” Tester told Semafor this week. “I always said we got to put side rails on it.”

The Harris campaign did not respond to requests for comment.

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Know More

During a fundraiser on Sunday, Harris pledged support for digital tokens that the Biden administration has sought to rein in, and reiterated it three days later.

“I will recommit the nation to global leadership in the sectors that will define the next century,” Harris said Wednesday, listing “blockchain” as a specific priority for her.

“We will encourage innovative technologies like AI and digital assets while protecting consumers and investors,” she said over the weekend. “We will create a safe business environment with consistent and transparent rules of the road.”

Crypto backers are particularly hopeful that Harris, if elected, would end what they call a siege spearheaded by Securities and Exchange Commission Chair Gary Gensler. Last year, the SEC brought 46 crypto-related enforcement actions — a new high — including against industry behemoth Coinbase alleging it violated the law by not registering with the government as a broker. Gensler also publicly opposed an industry-backed House GOP bill on crypto that passed earlier this year.

Nelson brings his own potentially crypto-averse background to his work for Harris; he served as a Biden administration Treasury official as the department proposed to tighten scrutiny of certain crypto assets’ potential misuse for money laundering.

On the Hill, however, Democrats were already starting to follow the lead of Harris’ team by building ties to the crypto sector, a $2 trillion industry with a historic libertarian streak. Senate Majority Leader Chuck Schumer, D-N.Y., joined a Crypto4Harris town hall last month and talked up the prospect of action in his chamber of Congress on industry issues before 2025.

Yet Schumer’s optimism is likely misplaced; Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., told Semafor she still hasn’t managed to draw a GOP backer for her plan to hand the Commodity Futures and Trading Commission more jurisdiction over digital assets.

And Harris still isn’t seen as favorable to the industry as Trump, who has publicly vowed to fire Gensler if elected.

“They’re trying to figure out what the right place for her to be is,” said Blockchain Association CEO Kristin Smith, who has spoken with Harris’ team. “In a perfect world, we would want to see something a little bit more fleshed out.”

No matter who’s president next year, though, a crypto regulatory battle is likely to take place in Congress. Anticipating that possibility, crypto companies have spent at least $119 million in the 2024 election, pumping it into super PACs backing pro-crypto candidates, according to the nonprofit watchdog Public Citizen.

“I have no problem with people buying and selling crypto,” Massachusetts Democratic Sen. Elizabeth Warren, perhaps crypto’s most prominent skeptic in Congress, told Semafor.

“We need to make sure we have curbs in place, like we do in every other part of our financial system, so that crypto can’t be used by terrorists, drug traffickers and rogue nations,” she added.

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Joseph’s view

Harris has carefully chosen just a few policy areas to distinguish herself from Biden, and it’s notable that crypto is one of them. She’s now reiterated her support for the digital asset community at least twice in public, bringing on Cuban and former Trump aide Anthony Scaramucci to informally advise her campaign on crypto.

The campaign-cash onslaught unleashed by the crypto industry makes it an attractive sector to court, at least as a possible insurance policy against it spending heavily against her.

But friendliness during campaign season doesn’t always translate into the same approach after an election – so her stance on Stabenow’s regulatory proposal may be a better gauge of her crypto attitudes than any private meetings or speeches.

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The View From a crypto skeptic

Rep. Brad Sherman, D-Calif., argues the crypto sector’s influence over Harris will be short-lived and limited to the 2024 campaign. He said he’s also spoken with Harris’ team.

He argued that Harris wouldn’t dial back regulations and would “stand firm” on rules to prevent money laundering, as well as to compel crypto platforms to verify customers’ identities.

“This is a political season. The crypto people are flashing huge amounts of money,” Sherman told Semafor. “We know they’re playing big. If that means they get a meeting, they get a meeting.”

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Notable

  • Trump has warmed up to a crypto industry he once despised, per The Wall Street Journal.
  • Harris’ crypto-friendliness could help her with young men who are breaking heavily for Trump, per Axios.
  • There’s an influx of crypto cash in the Ohio Senate race, where crypto skeptic Sen. Sherrod Brown is facing off against GOP candidate Bernie Moreno, The Washington Post reported.
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