A new report warns against “deep risks” in American policy as cryptocurrency companies increase their political expenses and Donald Trump supervises regulatory retirement while promising to create a “cryptographic strategic reserve”.
The situation “illustrates the deep risks that the uncontrolled political expenses of companies present, in particular in the volatile and often unpredictable industry of cryptocurrencies”, reads the report, of the Center for Political Accountability (CPA), a without-goal which defends the political disclosure of companies.
“The aggressive thrust for deregulation, combined with opaque and inexplicable political contributions, has not only raised red flags among regulators, but also eroded the confidence of investors and public confidence in the long -term viability of these companies.”
In the definition of the CPA, cryptocurrency, “often shortened in” crypto “, is a monetary technology that emerged in the early 2010s … intended to bypass traditional central authorities such as banks to allow decentralized transactions and peer-to-pair, recorded in highly encrypted digital books”.
The new report notes that “some public companies active in these areas have started to engage in substantial political expenses at the national level and the state – up to more than $ 134 million in the 2024 alone”.
After the elections, notes the CPA, the Kraken and Coinbase cryptographic companies were part “a number of … public companies making donations of $ 1 million to the Trump inaugural fund”. With Trump in power, the Securities and Exchange Commission (SEC) abandoned the proceedings against Kraken, which would formerly have an “exchange of values not registered” and Coinbase.
These measures followed the departure on the day of the inauguration, on January 20, of Gary Gensler, confirmed as president of the dry under Joe Biden, but which Trump had sworn to withdraw. Caroline Crenshaw, a commissioner confirmed during the first term of Trump, but like Pensler, opposed by Crypto, was about to serve a second term of four years but must be replaced.
“Crypto money played such an important role in the elections,” said Bruce Freed, president of the CPA. “Take a look at some of the candidates who went down where there were heavy cryptography expenses.
“Take a look at the case (the progressive and cryptographic skeptical representative) Katie Porter in the primary (American Senate) in California. Adam Schiff (a more friendly democrat) took advantage of it. You had the strong cryptographic expenses against Sherrod Brown (an outgoing democrat, defeated in Ohio by the friendly republican Bernie Moreno), because he was president of the banking committee of the Senate (and cryptographic skeptical).
“And then you take a look at the dry, and you take a look at the surveillance and regulation of the crypto, and some of the application measures that have been put under Gary Gensler against the crypto have now been abandoned. You can therefore see a very significant impact in a short period of time, cryptographic money. »»
Ben Schaffzin, deputy director of research and the main report of the CPA, said that crypto companies “exploded all the other industries in terms of external expenses” in 2024. “We have not seen something like that before … And now we see the Trump administration moving very quickly around their idea of this” cryptographic strategic reserve “,” said Schaffzin.
This month, Trump, who launched his own Crypto companies, wrote on his social media platform that the use of taxpayers’ money to create “an American crypto reserve” “would raise this critical industry after years of attacks by the Biden administration”, in the midst of pressure to “ensure that the United States is the cryptographic capital of the world”.
Trump signed an executive decree to establish the reserve on Thursday. On Friday, he organized a “cryptocurrency summit” from the White House, followed by a reception organized by Coinbase.
Schaffzin and another author author Jeanne Hanna, vice-president of the CPA research, notes the appointment by Trump by David Sacks, a South African entrepreneur and cryptographic investor, as “cryptographic Czar”.
Sacks “would have disabled his participations of personal crypto”, write the authors, but “he remains to be seen if (he) will also unfold his investment company, of which he remains a partner and (which) wishes to take advantage of the documents mentioned in the executive decree if it is bought in large numbers by the American government.
After promoting the newsletter
“This spectrum of irregularity does nothing to underline the concerns concerning the nature of payment of the cryptocurrency.”
When asked if the Crypto’s prospects would have been less worrying if Kamala Harris had become president, Hanna said: “These expenses were incredibly bipartite … (but) like many things in the last six weeks (since Trump took power), I think that the pace of what was carried out in the cryptographic industry was accelerated by some of the executive meetings space. But I think that perhaps the global regulatory environment by the congress might not have been considerably different under Harris compared to Trump. “”
Freed said: “With Trump, you have a much more transactional approach to politics and the development of policies, and I think it’s very, very important on (crypto). When you see the money that has flocked, for example, against Sherrod Brown, you mainly see crypto wanting to free itself from any surveillance and regulation.
“There was clearly a huge interest in what is happening in the dry … The crypto clearly did not want to be engaged in any way by monitoring or regulation.”
To illustrate the dangers of crypto in politics, the CPA report quotes recent events in Argentina, where Javier Milei – like Trump, a right -wing populist president – promoted “a scam called $ Libra who lost all its value, nearly $ 4.6 billion in a few hours.
“While President Milei quickly removed his approval from the token after the fact, his political opposition filed more than 100 complaints of fraud to the government, which prompted a judge to open an investigation” in the midst of the indictment of Milei.
“This scandal has only highlighted the systemic risks surrounding the crypto,” write the authors of the CPA.
Schaffzin said Argentina should be a warning to Trump’s administration, adding: “Preaching this kind of thing from above, from a frame that does not really understand the mechanisms of the crypto and how risky it is for ordinary consumers who do not know the traps in this product, is extremely dangerous.”
