Former US President and Republican presidential candidate Donald Trump attends a campaign event in Racine, Wisconsin, USA, June 18, 2024.
Brendan McDiarmid | Reuters
On a cool, sunny June evening, San FranciscoIn 2011, venture capitalist David Sachs’ Pacific Heights mansion hosted a rare event in one of America’s most progressive cities: a major Republican political fundraiser.
The evening’s guest of honor was former President Donald Trump, who delivered a formal address from a curtained-off stage to guests who had paid up to $300,000 to attend.
Trump, the presumptive Republican presidential nominee, promised to ease regulations on cryptocurrencies and “not get in the way of innovation” if elected in November, a person at the event told CNBC. After finishing his speech, Trump called for the audience to speak.
Blockchain giant Ripple’s chief legal officer, Stuart Aldeloti, explained that the company has spent more than $100 million defending itself against a lawsuit brought by the Securities and Exchange Commission.
Aldeloti’s comments were intended as an example of how regulatory actions taken by the SEC under Chairman Gary Gensler have harmed the company and the industry as a whole, according to guests and people familiar with the matter who spoke on condition of anonymity during the private meeting.
A second crypto executive also fighting the SEC was in the audience as Aldeloti spoke: Paul Grewal, the company’s chief legal officer. Coinbase.
In 2020, before President Joe Biden took office, The SEC has filed charges against Ripple and its founders The SEC filed the suit alleging that the company violated securities laws by acting as an unregistered broker of digital currency tokens that the SEC regulates as securities. In 2023, the SEC filed a similar complaint against Coinbase, the largest cryptocurrency trading platform in the United States.
The litigation is ongoing and the companies have denied violating securities laws. Aldeloti’s comments at the Trump fundraiser have not been previously reported, but he has made similar comments elsewhere.
Complaints about Gensler’s regulatory policies have taken on a political overtone this year as crypto investors seek to exert more influence in Washington, DC.
President Trump has capitalized on this discontent in recent months, repositioning himself from a crypto skeptic to a crypto advocate, and early signs suggest that this shift is winning him support among the small but active crypto community.
Beyond complaining about Gensler, some Trump allies in the industry are trying to shape the network under a future Trump administration — starting at the top.
Crypto investors have floated several names in recent weeks as possible candidates for SEC commissioner positions if Trump wins a second term, according to three people familiar with the conversations.
Those names include J. Christopher Giancarlo and Heath Tarbert, former chairmen of the Commodity Futures Trading Commission during the Trump administration.
Former Chairman of the Commodity Futures Trading Commission (CFTC) Christopher Giancarlo made the following remarks at a House of Representatives Agriculture Committee hearing in Washington, DC, USA, on Tuesday, June 6, 2023.
Ting Sheng | Bloomberg | Getty Images
Other names being mentioned include Dan Gallagher, who served as an SEC commissioner under President Barack Obama for two terms and is now chief legal officer for the investment platform Robinhood.
Gallagher said he was honored to be mentioned as a possible candidate for SEC chair under the Trump administration.
“I have had the honor of serving in a variety of roles at the SEC, including as Commissioner,” he said in a statement to CNBC.
“I care deeply about the SEC and my hopes for the new SEC chairman are to promote market access and ensure the United States remains at the forefront of financial innovation,” he said.
In this June 14, 2011, photo, Daniel Gallagher, a nominee for Securities and Exchange Commission, listens to a Senate Banking Committee hearing on Capitol Hill in Washington.
Andrew Haller | Bloomberg | Getty Images
The fourth name mentioned by someone close to Trump was Paul Atkins., According to three people familiar with the conversation.
Atkins, who served as an SEC commissioner under former President George W. Bush. Opposed He opposed the agency’s policy of imposing huge fines on companies that violated securities laws. He later played an influential role on President Donald Trump’s transition team in 2016, helping to shape the president’s laissez-faire approach to financial regulation.
“It’s a big mess over there right now,” Atkins said of the SEC in an interview with CNBC. “I think it needs a lot of work. It needs to change direction.”
Atkins said he had not heard from Trump or his team about a potential role at the SEC, and when asked whether he would accept the SEC job if Trump wins, he said “who knows.”
If Trump is elected, the SEC and cryptocurrency policy overall could depend on other factors besides who chairs the commission.
At least 16 former Trump administration officials are currently lobbying for the cryptocurrency industry, according to OpenSecrets data.
In a Trump administration, they would likely be front-runners for key posts at the SEC, Commodity Futures Trading Commission and Federal Trade Commission that could influence cryptocurrency regulation.
Biden allies sound the alarm
While the crypto industry can lobby President Trump and the Republican Party to prepare for SEC reform, crypto investors allied with Democrats need to be more careful how they approach those in power.
Gensler was one of Biden’s first nominees for 2021, and his approach to cryptocurrency has helped set the tone for the administration’s overall policy, despite the SEC’s independence from the White House.
Over the past three years, Gensler has not softened his criticism of digital currencies; if anything, he has become more critical than ever.
“Some of the leading figures in this space from years ago are either in prison, on the brink of prison or awaiting extradition,” Gensler said of cryptocurrency in a recent interview with Bloomberg.
According to people familiar with the matter, the widespread perception that Biden is opposed to cryptocurrencies and Trump is in favor has raised concerns among some of Biden’s supporters, leading them to appeal directly to senior White House officials.
On June 14, venture capitalist John Doerr hosted a meeting with White House Chief of Staff Jeff Zients at his home in Woodside, California.
More than a dozen cryptocurrency enthusiasts gathered to speak with Zients, according to a person with direct knowledge of the meeting. Technology investor Ron Conway also joined the call by phone.
Several of the guests spoke to Zients about Trump’s growing popularity among cryptocurrency holders, attributing this rise in approval ratings in part to Gensler’s public comments and policies on cryptocurrency.
The group argued to Zients that Gensler should not be the sole public face of the Biden administration’s crypto policy because his comments could lead crypto holders to support Trump instead of Biden.
An SEC spokesperson did not respond to CNBC’s request for comment.
John Doerr, senior partner at Kleiner Perkins Caufield & Byers, speaks at the TechCrunch Disrupt SF 2015 conference on Tuesday, September 22, 2015 in San Francisco, California.
David Paul Morris | Bloomberg | Getty Images
Doerr and Conway have supported Democrats, including Biden, for more than a decade. Door She hosted a fundraiser for Biden in February, and Federal Election Commission records show Conway has donated $600,000 to Future Forward, a pro-Biden political action committee.
Both Doerr and Conway are investors in cryptocurrencies. Conway’s venture capital firm, SV Angel, Coinbase Meanwhile, Doerr’s Kleiner Perkins firm has been investing in cryptocurrency businesses for years, most recently participating in a $2 million seed round to back the cryptocurrency. Data analysis Startup, Skew.
A White House spokesman defended the president’s response to cryptocurrencies, saying administration officials are meeting with a range of stakeholders in the crypto industry.
“President Biden has launched the first comprehensive approach to support innovation in digital assets while protecting consumers and investors from the risks associated with new technologies,” White House press secretary Robin Paterson said.
The White House did not address any warnings it had received about its actions against the cryptocurrency industry, nor did it respond to additional requests for comment about Zients’ meeting at Doerr’s home.
Conway and Doerr did not respond to requests for comment.
