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Crypto’s Trump problem

I’d been covering crypto for several years at Bloomberg News before I fell for it. Reporters aren’t really supposed to do this, yet source capture and understanding a topic deeply can often lead to a feeling of attachment to whatever beat that journalist covers. With crypto, though, it went deeper for me, and that was down to the people I got to know, the folks who were building the underlying tech. This was during the reporting for my book Out of the Ether, when I’d estimate a hundred hours of interviews allowed me to re-create the origin story of Ethereum.

All the most interesting human traits were on display among the Ethereum co-founders and the dozens of other invaluable people who built Ethereum -- idealism, greed, territoriality, optimism, hope and treachery. I say in the book that Ethereum was made despite the people around it, the will of the idea was so strong it overcame the human failings that attended every step of its design. But man, what a cast of characters. A writer’s dream.

The funny thing with people, though, is that they’re people. From those small beginnings in 2013, the Ethereum world has exploded and we now use “crypto” as shorthand for a complex interwoven ecosystem. Bad actors have multiplied, scams are ever-more sophisticated and as with any industry there are now political factions within it. Unfortunately, some who have immense influence due to their positions or longevity are now exploiting their platforms to shill for Donald Trump as a supposed savior to an industry that doesn’t need one.

A few things – I have no problem with political discourse, disagreement or vehement advocacy for a position; arguing in good faith is a must; I believe the conservative-liberal split in the U.S. makes us stronger as it leads to more thoughtful legislation and allows for states to experiment with novel models of governing. Lastly, I wouldn’t feel this way about a traditionally conservative candidate, for Donald Trump is about as conservative as a Castro Halloween parade.

There are two main and interlocking objections I have here. The first is that the crypto industry doesn’t need Trump to save it, it’s headed in the right direction and enjoys bipartisan support in Congress for the first time. The gears of government grind slowly, and while the regulatory outlook may seem bleak, it’s not.

Second, the damage a second Trump term would cause outweighs any single-issue industry concern. These are dangerous political times, and putting your head in the sand regarding all the ways Trump would move the United States backwards simply so you personally gain is a disservice to the country.

What’s most disappointing is the Trump support from crypto leaders is coming straight from their wallets. They’re putting self-interest above country. In June, Ryan Selkis, who featured as the lead anecdote in a New York Times story about blockchain executives backing Trump, told the newspaper,  “The crypto vote has already been won by President Trump…It’s over.”

Is it?

Selkis founded Messari, a Bloomberg clone but for crypto – an all-in-one data, analytics and research service. He also hosts the Mainnet conference in New York every year. I’ve known Ryan for a long time but haven’t spoken to him in years. I’m unsure when he took a hard turn right or if he was always of that persuasion. His unwavering support for Trump appears completely devoid of any examination of the other disastrous aspects of the former president’s first term in office – separating children from their families, inciting a treasonous revolt, abandoning the fragile but absolutely necessary fight against climate change, responding to Covid in an unhinged way that clearly resulted in American deaths and licking the boots of Vladimir Putin. And let’s not forget Trump’s inability to learn policy and willful disdain for experts.

The only ex-President to also be a convicted felon, Trump somehow escapes Selkis’s gaze in all these areas. Yet he rages against Joe Biden on Twitter. In a post the other day he said, “I choose my political allegiances based on who is mentally competent to be commander-in-chief, who holds staff accountable, and who isn't running the most provably corrupt administration in modern American history.”

Biden’s administration is the “most provably corrupt,” yet not a shred of evidence backs that up. “I also like Trump's evolution on crypto,” Selkis added. He tweets that he believes God spared Trump in the recent assassination attempt and reposted a video featuring a MAGA wet dream cast of characters including Alex Jones, whose psychological warfare against parents who lost their young children at the Sandyhook massacre is one of the most vile and abhorrent displays I’ve witnessed.

Again, if this was support for a traditional conservative, I’d have no beef with it. But Trump is clearly a danger to this country and is vowing to prosecute his enemies if reelected. He is normalizing, and lionizing, the thugs he instigated to storm the Capitol on Jan. 6. But, whoa, he’s flipped and is now pro-crypto. Fuck yeah!

Other notable crypto leaders who have come out for Trump and donated bigly to him are Cameron and Tyler Winklevoss, founders of Gemini, and Ripple/XRP’s Brad Garlinghouse, aka the luckiest man in crypto.

Some more mental gymnastics came from Jesse Powell, founder of the crypto-exchange Kraken. “If the biggest criticism of @realDonaldTrump is that he's self-interested, we should welcome him,” Powell tweeted on June 29. “If” is doing a metric ton of work in that sentence, isn’t it? How is that the most-damning critique you could list about a known liar, a known misogynist, a known racist and a known con man? Powell went further into fantasy land when he said in the same post that Trump “can give you all the philosophical, humanitarian, economic and national security reasons why it makes sense” to be pro-crypto. Donald Trump will talk your ear off about the differences between Coke and Diet Coke. Waxing philosophical about a decentralized future that features an alternative culture and economy based on blockchain technology is not, let’s say, Trump’s métier.

Powell said his last political donation before he gave Trump $1 million a few weeks ago was to Barack Obama. “I believed that Obama could uniquely inspire and unite this country. Now, I believe Trump can do the same,” Powell said. The uniter who, again, is calling to prosecute his political rivals as president and said Liz Cheney and the other members of the Jan. 6 committee should be jailed.

The naivete of the crypto Trumpists is staggering. There are two aspects to it. The first is the frustration that’s borne from the ridiculous and capricious way the Securities and Exchange Commission – and the Biden Administration – has treated crypto in the past few years. I share this frustration. I’ve written many times about how Gary Gensler is a discredit to the SEC and should resign; I’ve said Senator Elizabeth Warren is likewise a disgrace for her willful misrepresentation of crypto. But one thing I’ve learned by covering finance and regulation for two decades is that you must play the long game.

For all the handwringing, no substantial curb on crypto has become U.S. law. Not yet. Backdoor operations like choking off banking services for crypto firms emerged but have been exposed and successfully dealt with by crypto leaders and their lobbyists. Of course it’s not perfect, but the long game is bending in favor of crypto. Acting like the sky is falling and the industry’s only savior is Donald Trump shows a poor understanding of how the sausage is made in DC.

Second, what in the world makes crypto leaders think they can trust Donald Trump to enact a pro-crypto agenda? Ask anyone in New York City if they’ve done business with Trump in decades. He’s a known liability to banks and investors and loves to stiff the people he owes money to. Go back a few years and Trump was a Democrat who visited Jeffrey Epstein’s island like it was a three-hour cruise on the SS Minnow. But now he’s going to do right by crypto? He’ll do or say anything to get crypto-savvy voters on his side yet gives not a single assurance based on his past that he’ll keep his word.

I was glad to see Vitalik Buterin come out with a somewhat similar stance to mine, albeit without naming names and the specifics I’m addressing here. He makes valid points that a recent turn toward crypto should be weighed against any candidate’s larger world view about privacy and their stance on government power.

Vitalik also points to the danger of being a single-issue voter. “By publicly giving the impression that you support ‘pro-crypto’ candidates just because they are ‘pro-crypto’, you are helping to create an incentive gradient where politicians come to understand that all they need to get your support is to support ‘crypto’,” Vitalik wrote. “It doesn't matter if they also support banning encrypted messaging, if they are a power-seeking narcissist, or if they push for bills that make it even harder for your Chinese or Indian friend to attend the next crypto conference - all that politicians have to do is make sure it's easy for you to trade coins.”

Arthur Hayes of BitMex infamy also had a lucid take.

I know I’m not alone in being pro-crypto and anti-Trump, but it would make me feel better about the industry to hear more voices say we don’t need Trump because of the expense he would cause to America’s political health. And I’m not anti-Trump because I’m pro-crypto. If digital assets had never been invented, I’d still be vociferously against Trump because in this instance I value my country over my financial interests (I did start a crypto-media company after all).

It’s hard to square support for Trump by anyone who believes in the paradigm-shifting potential of this technology, which in many instances comes down to the creation or public goods. Let’s imagine if zk-proofs make it impossible to know who is behind privacy tech in the U.S. Is Trump pro or con?

The answer is the Republican nominee is against privacy and an individual’s control over their own digital lives. He’s a despicable person who should never be anywhere near power again. He has shown us who he is, we need to believe him. He needs to be defeated at the ballot box resoundingly. There is no reason to think another Biden term or another Democrat who is elected president in 2024 will hurt the industry. To think so is to significantly undermine the foundational technological breakthrough of blockchain -- y’all have made something beyond politics.

Those who are putting their self-interest ahead of what’s best for the country right now need to be called out and countered. If you truly believe Trump is a savior, that’s fine. That’s your right. But I will push back as hard as I can in the hope the scales fall from your eyes.

This is about people, the generous and daring people like Vitalik Buterin, Griff Green, Alex Van de Sande, Jordi Baylina, Roxanna Sureneau, Anthony Di Ilorrio, Amanda Cassett, Lefteris Karpetas, Emin Gun Sirer, Christoph Jentzsch, Fabian Vogelsteller, Marjorie Hernandez and Joe Lubin – among many others -- who deserve credit and who helped make “crypto” this catchall phrase we all now throw around. They weren’t perfect, no one is. But I feel it’s necessary to express my profound discomfort when others in the industry try to co-opt their sense of optimism and hope to promote values that are as anti-crypto as a lemonade mixer at Peter Thiel’s compound.

Crypto doesn’t need to be a consideration as U.S. voters go to the polls in November. Preventing a second term for Donald Trump is what matters most. The stakes are existential. The stakes are too high. — Matthew Leising, editor in chief, Decential Media

Have you read the definitive history of Ethereum? No? Well then get your copy of Out of the Ether while you can.