US tech industry group urges Biden to support crypto regulation, says Trump has capitalized on lack of clarity

U.S. tech industry group the Chamber of Progress has urged President Joe Biden to voice support for comprehensive crypto regulation, saying Republican rival Donald Trump has capitalized on the administration's lack of clarity.

Biden’s support for a “crypto-positive” digital assets agenda would provide his administration with a chance to lead on an issue young voters identify with, Chamber of Progress Director of Financial Policy Kyle Bligen wrote in a letter to the President on Tuesday. 

For the millions of Americans currently holding or trading cryptocurrency, passing bipartisan digital asset regulations is “front and center this cycle,” Bligen said. “Overwhelmingly, this is an issue important to Gen Z and Millennial voters, with over 50 percent of those age groups supporting a federal policy that encourages digital asset use in the U.S.”

“Becoming the first president to set a clear path forward for digital assets in the U.S. is a pivotal opportunity for this administration,” Bligen added.

The Chamber of Progress is a center-left tech industry policy coalition that promotes progressive policies and aims to ensure that technological advancements benefit all Americans. It is funded by major tech companies like Amazon, Google and Facebook, among others, and focuses on issues such as voting rights, fair marketplaces and progressive taxation.

However, Bligen was critical of regulatory uncertainty surrounding the crypto industry under Biden’s administration, saying it harms investors and stifles American innovation.

“Under the Biden Administration, consumers have suffered through a period of regulatory uncertainty that has devalued the digital assets they hold and limited their utility,” Bligen wrote. 

The Chamber of Progress Director of Financial Policy pointed to the U.S. Securities and Exchange Commission Chair Gary Gensler’s view that the Securities Exchange Act of 1933, 1934 and the Howey test remain sufficient to regulate digital assets, despite multiple courts having “rejected his position,” adding to regulatory ambiguity.

Bligen also criticized Biden’s veto in May on a bipartisan resolution to overturn the SEC’s Staff Accounting Bulletin 121, also known as SAB 121 , which could prevent banks from safeguarding digital assets, as well as the White House’s opposition to the passage of the Financial Innovation and Technology for the 21st Century Act, also known as FIT21 , proposing a joint SEC-CFTC crypto rulemaking regime.

Trump capitalizes on lack of clarity

Former President Donald Trump has capitalized on the administration’s lack of clarity, according to Bligen, by reversing his position on cryptocurrency and portraying Biden as “an opponent of American technological leadership and economic progress.”

“He [Trump] has committed to courting the cryptocurrency vote and has reportedly raised millions from founders and investors. However, you can still win this issue,” Bligen wrote.

“In the months leading up to the November election, you can make good on your promise to collaborate with Congress on developing legislation,” Bligen added. “Now is the time to speak out in support of bipartisan progress regulating digital assets.”

Biden and Trump’s contrasting stance on crypto

Last month, Kraken founder Jesse Powell said he had made a $1 million personal donation to Trump, primarily in ether, in support of his pro-crypto stance. Powell criticized the Biden administration's regulatory approach toward crypto, citing Senator Elizabeth Warren and SEC Chair Gary Gensler as industry adversaries.

Sen. Warren, seeking her fourth term as a U.S. Senator, is known for her often critical stance on crypto and desire to build up an "anti-crypto army" as part of her re-election campaign. SEC Chair Gensler has also been critical of the industry, with the regulator ramping up its enforcement action against crypto companies, including Kraken, under his tenure.

In contrast, Trump has shown strong support for crypto in recent months, accepting donations in cryptocurrencies, and has also gained backing from Gemini's Winklevoss twins and Ark Invest CEO Cathie Wood, despite previously being critical of the industry.

Earlier this week, the Republican Party championed crypto as part of its official platform for the 2024 U.S. elections, vowing to end an “unlawful and un-American crackdown” on the U.S. crypto industry. The platform includes promises to “defend the right to mine bitcoin” and allow crypto holders to self custody their tokens, in addition to opposing the creation of central bank digital currency. 

In May, sources told The Block they noticed a significant “shift” in tone from the Biden administration and campaign toward crypto, with a new willingness to understand digital assets and their communities. However, that has yet to transpire into tangible policies.

Crypto's increasing role in US elections

Crypto has increasingly become a part of the campaign trail, with over 50 million Americans reportedly owning some form of cryptocurrency. More than 20% of swing state voters view cryptocurrency as a key issue in the upcoming U.S. elections, according to an online survey Digital Currency Group released in May.

Crypto industry super PACs have also raised more than $100 million for the 2024 congressional elections, according to a report from consumer advocacy group Public Citizen, which gathered data from Opensecrets.org. Over half the money comes from direct corporate expenditures, primarily Coinbase and Ripple Labs, the report said, with $11 million from each of the Andreessen Horowitz founders, $5 million from the Winklevoss twins and $1 million from Coinbase CEO Brian Armstrong.