The Biden administration opened a line with the cryptocurrency industry Wednesday, as the White House and Democrats find themselves increasingly at odds with powerful players in the digital assets space.
Anita Dunn, a senior adviser to President Biden, met with dozens of crypto leaders in her personal capacity on Wednesday at a roundtable organized by crypto-friendly Democratic Rep. Ro Khanna (Calif.).
Khanna was also joined by Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Joe Neguse (D-Colo.), as well as billionaire Mark Cuban, who has backed Biden’s bid for reelection but has also criticized his administration’s approach to crypto.
Several people in attendance touted the meeting as “productive” and commended the California Democrat for arranging the roundtable.
“I really give Congressman Khanna a lot of credit for bringing together something like 30 or maybe more industry leaders to have a chance to engage directly with Ms. Dunn and, by extension, the White House,” said Paul Grewal, chief legal officer for the popular crypto exchange Coinbase.
“It was clear that those in attendance understand the importance and opportunity crypto provides,” said Sheila Warren, CEO of the Crypto Council for Innovation.
“I left hopeful about future conversations and even more committed to advocating for the promise of this groundbreaking technology to transform systems,” she added in a statement.
Grewal described the meeting as a “make-or-break moment” for the Biden administration to turn around its “almost uniformly hostile posture” toward crypto, as Republicans and former President Trump embrace the industry.
“We are at a make-or-break moment with Republicans fully embracing crypto, baking it literally into their platform for the upcoming convention in very specific and concrete terms,” he told The Hill. “So, I think the administration has a choice to make at this point.”
The GOP released its official platform Monday ahead of next week’s Republican National Convention, arguing that the party will ease restrictions on emerging industries like crypto and artificial intelligence (AI).
“Republicans will end Democrats’ unlawful and unAmerican Crypto crackdown and oppose the creation of a Central Bank Digital Currency,” the platform reads. “We will defend the right to mine bitcoin, and ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control.”
The Biden administration, on the other hand, has largely been viewed as inhospitable to the industry. In particular, the Securities and Exchange Commission (SEC) has been criticized by crypto firms for being overzealous in its enforcement.
“Unfortunately, the majority of Dems continue to enable [SEC Chair Gary] Gensler’s unlawful war on crypto – sabotaging the ability for American innovation to thrive,” Ripple CEO Brad Garlinghouse wrote in a post on the platform X after Wednesday’s roundtable.
“It’s no wonder the GOP has announced a pro-crypto stance,” he continued. “Gensler will go down as the Luddite of his time. Words are easy, action is hard but necessary. Choose wisely. Voters are paying attention.”
Others in the crypto space have also warned of potential political fallout from Democrats’ current stance on the industry.
“We worry that the administration has, up until this point, been operating on a misunderstanding of the politics of the issue,” Grewal said.
“I think there’s perhaps been an impression that somehow going after the crypto industry is going to be something that constituencies that the administration cares a lot about would cheer on,” he continued.
“But if you talk to young people, if you talk to people from communities of color who disproportionately participate in crypto, … they view an attack on crypto as an attack on them,” Grewal added.
Cuban suggested in May that Gensler’s crypto approach could cost Biden the election.
“If @joebiden loses, there is a good chance you will be able to thank @GaryGensler and the @NewYork_SEC,” Cuban wrote on X. “Crypto is a mainstay with younger and independent voters.”
“This is also a warning to Congress,” he added. “Crypto voters will be heard this election.”
Some Democratic lawmakers have split with the administration on crypto and supported Republican-led legislation.
In May, 71 House Democrats joined most Republicans to pass the Financial Innovation and Technology for the 21st Century Act (FIT 21), which laid out a new framework for crypto regulation between the SEC and the Commodity Futures Trading Commission (CFTC).
Gensler came out against the legislation, arguing it would “create new regulatory gaps and undermine decades of precedent.” While the White House said it also opposed FIT 21 due to a lack of “sufficient protections for consumers and investors,” it did not expressly threaten to veto the bill.
However, Biden did veto a House resolution that sought to undo an SEC crypto rule. More than 20 Democrats, including Khanna, supported an unsuccessful attempt to override the president’s veto on Thursday.