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Everyone at Consensus 2024 is talking about Biden’s Crypto Flip Flop. It is true?
Austin, Texas – The biggest news this year at Consensus appears to be the political sea change taking place in the Democratic Party regarding cryptocurrencies. While President Biden’s administration has essentially maintained the same reluctant-to-the-point-of-hostile approach to cryptocurrencies as its predecessor, it has been actively hostile since the industry bottomed in 2022 (the year of cryptocurrency hell). . The easiest way to sum up Biden’s “all-of-government” attempt to wrangle the cryptocurrency industry is with the slogan Operation Choke Point 2.0, coined by VC Nic Carter to describe the apparent debanking of many crypto firms.
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But within a few weeks, the situation changed. Starting with the bipartisan vote of the House and Senate to repeal the US Securities and Exchange Commission (SEC). much maligned accounting bulletin (SAB121) and extends to yesterday’s revelation that the Biden administration is reaching out to cryptocurrency companies in a late-stage effort to hear what they have to say on the matter what a good crypto policy would look likeit has become (almost) credible that better days are ahead on the political, regulatory and legislative front for the domestic cryptocurrency industry.
The feeling is in the air, probably because everyone seems to express it out loud. For example, on the Consensus stage yesterday, NYSE President Lynn Martin said he doesn’t believe cryptocurrencies will remain a “partisan” issue for much longer. In the same way that stocks and bonds are mostly apolitical, it doesn’t make much sense to view cryptocurrencies as inherently political (in fact, cryptocurrencies might have better reasons to actually be apolitical, given the technical design of protocols like Bitcoin). .
However, not everyone is aligned here. For example, a well-known cryptocurrency lawyer working for a hot DeFi startup, who asked not to be named given the sensitivity of his work, said he didn’t think Biden’s apparent change of heart was genuine. “He’ll probably go back to his course if re-elected,” he said. Asked whether he felt some weight off his shoulders, or whether his job had become or will become easier, under apparently improving regulatory conditions, he said “absolutely not”. Today is the same as yesterday.
Austin Campbell, a Columbia University economics professor connected to the D.C. Circuit, echoed this idea when he noted that the seemingly parallel change in Congress is likely not permanent. In fact, if you look at how the vote on the historic Financial Innovation and Technology for the 21st Century Act (FIT21) unfolded, it was largely split by age. While this in itself might be a good thing, given that younger members of Congress are more likely to “get it,” and despite the fact that American politics is a gerontocracy, dinosaurs will not rule the world forever.
This morning, Messari founder Ryan Selkis, who recently spoke with former President Trump at the Mar-a-Lago Club, and Uniswap Labs lead attorney Marvin Ammori, a longtime Democratic operative, actually discussed the recent political machinations taking place on the main stage. Selkis’ main argument was that any easing on cryptocurrencies by Democrats is largely the result of Trump taking over the “single-issue” crypto vote and should be treated as suspect. While Ammori argued that policy changes don’t flip like a switch and that things like SAB121 and FIT21 are the result of true bipartisan collaboration and successful crypto lobbying.
“The point is that we don’t necessarily want to be partisan, because in the long run that would be a setback,” Ammori said. In other words, cryptocurrencies should be cautious about aligning themselves with a party or candidate, especially considering that campaign promises are rarely kept. For his part, Selkis wanted to move away from wishful thinking (i.e., that Democrats might suddenly support cryptocurrencies after so many years) and into the realm of realpolitik (i.e., that if the theory of bipartisan support were true, it would be because Democrats’ needs have changed.)
“Democrats are like a cheating spouse right now; we caught them with their pants down,” Selkis said. “To reward this Democrat, the mainstream party right now is not only foolish, but I think it demonstrates a profound lack of self-respect: They need to do penance.”