Schumer Sets Stage for New Era of U.S. Crypto Politics

The big news from the Crypto4Harris town hall Wednesday night is that Senate Majority Leader Chuck Schumer is going to try to pass a crypto bill through the upper chamber by the end of the year.

"Congress has a responsibility to provide common sense and sound regulation on crypto, and we need your support to make sure that any proposal is bipartisan," he told the online group, which was assembled to prove that Democrats are “engaged” on crypto issues this election year. Of course, the background here is that Democrats… haven’t exactly been engaged on crypto for a long time.

The Biden Administration has said little publicly on the issue but has quietly backed a host of crypto-unfriendly actions through the Department of Treasury and, by proxy, the Securities and Exchange Commission. Senator Elizabeth Warren (D-Mass.), a close ally of SEC Chair Gary Gensler, is widely seen to have driven the administration crypto policy, which has involved a host of aggressive enforcement actions against the industry, while offering few clear guidelines as to what is and isn’t permissible when dealing in digital assets in the United States. So, to see Schumer make time on his schedule, appear at the Crypto4Harris event and make a legislative commitment is, to use a Biden phrase, a BFD.

Even if that effort may not become law (because it’s an election year and few ideas become law, ever), such action from a high-ranking Democrat is striking. A month ago, before Donald Trump gave his very pro-Bitcoin speech in Nashville, it’s not clear that Schumer even had a legislative wishlist on crypto.

The organizers of the Crypto4Harris event were certainly happy with how the evening went.

“We succeeded in spotlighting our big tent and showing that crypto is not just the loudest MAGA crypto bros you see online,” G Clay Miller, one of the organizers, told CoinDesk in an interview. (Miller, a former Senate staffer, has a job in the crypto industry working for a leading digital assets advisory firm, but says his political work is separate.)

Miller said 1,500 people registered ahead of the town hall and that 1,000 were in attendance at any one time.

The organizers’ main goal was to show the outside world that Democrats were interested in getting things done on crypto, despite the Biden administration’s record. It was also to send a “loud message” to the Harris campaign that crypto was paying attention to what the vice president was, and wasn’t saying, on the issue. Miller said campaign staffers listened in and were impressed with what they heard. The big question is what it will take for Democrats to prove to crypto folk that they are serious about a “policy reset.” It’s unclear at this stage exactly what might be included in Schumer’s bill. But bipartisanship seems at least possible. Patrick McHenry (R-N.C.), who heads the powerful House Financial Services Committee and has been a leading voice for crypto legislation in this Congress, tweeted support for Schumer this morning.

Matthew Graham, a prominent crypto VC, also gave cautious support, echoing others.

Following the town hall, Custodia Bank's Caitlin Long said she was willing to reserve judgment on who might lead policymaking in a Harris administration.

Jake Brukhman, founder and CEO at CoinFund, was more skeptical:

“I saw a lot of politicians on this call, and a few industry people (mostly legal), and I didn’t listen to the whole event, but I didn’t see ANYONE resembling the crypto company founders of the 100+ companies we have in our portfolio at @coinfund_io,” he tweeted.

And many of those who supported Trump outright were dismissive. Here’s David Bailey, the BTC Media CEO who brought the former president to Nashville recently:

It’s hard to know where we’ll end up: Will there really be a Schumer-led bill this year? Will Harris support the work of groups like Crypto4Harris (she hasn’t said anything officially yet)? Will those in crypto who supported Trump as their only option now gravitate back toward Harris, whom they might support on other issues?

Who knows? What we do know is that D.C., Democrats are at least paying attention this year. They realize they have to do something on crypto policy. And it seems likely that the crypto vote, which until recently was all for Trump, might now be split.

The industry might even have something resembling a choice in November.

CORRECTION 03.55 UTC, 8/16/24: 1,500 people registered ahead of the town hall, not 15,000.