The Crypto Bros Are Back—and They Have a Dangerous Political Goal

After the spectacular fall of FTX CEO Sam Bankman-Fried, you might have expected the embattled cryptocurrency sector, and its sophisticated lobbying operations, to have ground to a halt. The then-nascent Biden administration had already turned its attention to crypto regulation, with the SEC lodging its securities charges against Ripple in February of that year—while also approving crypto exchange Coinbase’s request to go public. One of that company’s biggest investors, famed venture capital firm Andreessen Horowitz, lavished its money on other crypto players and launched an aggressive lobbying operation to shield the industry from regulations around tax reporting and money laundering—and, most importantly, to exclude it from SEC oversight. Kirsten Gillibrand and Cynthia Lummis, who were wined and dined by several crypto bigwigs—Grayscale, the Blockchain Association, the Chamber of Digital Commerce, BTC Inc.—and introduced a bill, in the midst of the summer 2022 crypto crashes, that would have achieved lobbyists’ goals of shifting governance away from the SEC and exempting digital assets from certain tax requirements, like capital gains. According to Puck News’ Theodore Schleifer, Andreessen is going even further by once again donating to crypto champions like Gillibrand and Lummis, and his firm dropped ample funds on a different crypto dark-money operation, Digital Innovation for America, which is aligned with a Republican consulting firm that has splurged on behalf of multiple candidates—like Emmer and California Rep. Young Kim—who’ve earned the crypto stamp of approval.