Is It Too Late For The Democratic Party To Court Crypto Votes?

The Democratic Party may have a tall task ahead if it wants to win over votes from the web3 community.

On Aug. 8, the Democratic Party hosted a Zoom meeting with cryptocurrency executives and industry representatives, according to Fox Business.

The meeting was hosted by Californian Congressman Ro Khanna and attended by high-ranking officials from the Biden administration, and sought to extend an olive branch to the crypto sector and drum up support for Kamala Harris’ Whitehouse bid. The attendees also included executives from Coinbase, Kraken, Uniswap, and Ripple.

However, the meeting reportedly went poorly, with anonymous sources recounting that web3 representatives “aggressively” assailed the Democratic Party for overseeing a hawkish regulatory regime led by the Gary Gensler-headed U.S. Securities and Exchange Commission throughout Joe Biden’s presidency.

“Executives didn’t hold back on telling the administration reps how much damage they’ve done to the crypto industry and to the Democrat Party with their actions against digital assets,” one attendee said. “They basically just got yelled at.”

However, Paul Grewal, Coinbase’s chief legal officer characterized the roundtable as a “Biden Administration meeting,” concluding that the focus now needs to shift to the Harris campaign’s stance on crypto. “She’s the perfect candidate to be a strong new face for crypto and make a break with the past,” Grewal added.

The meeting comes after Donald Trump and the Republican Partyhavefound success in courting support from crypto users in recent months.

Questions remain regarding Harris campaign

The meeting took place despite the policy platform of Harris and the Democratic Party concerning cryptocurrency currently remaining unknown.

Some Democratic Party supporters and web3 advocates have recently sought to characterize Harris as being friendlier to the sector than President Biden, with both SkyBridge Capital founder, Anthony Scaramucci, and celebrity investor, Marc Cuban, telling the press that a Harris presidency is expected to be more “open” to web3 than the outgoing administration.

A new advocacy group called Crypto4Harris also launched earlier this month. The organization describes itself as a collective of industry leaders and policy experts seeking to “back Harris while pushing for a nuanced policy stance that positions America as a leader in digital assets.”

However, Harris’ decision to name Minnesota governor Tim Walz as running mate suggests the party may be likely to prioritize bolstering consumer protections over innovation in the web3 industry.

On Aug. 1, Walz oversaw the introduction of new crypto laws governing the operations of crypto kiosks in Minnesota. The legislation requires that crypto kiosks disclose terms and conditions to consumers, issue refunds to new customers who are the victim of fraud, and limit daily transactions to $2,000 for new customers. In 2019, Minnesota also introduced legislation prohibiting political donations in the form of digital assets.

In March 2023, Walz notably returned a $4,000 donation made by Nishad Singh, the former director of engineering at the failed cryptocurrency exchange, FTX, in October 2022.

Joe Witt, CEO of the Minnesota Bankers Association, told Politico that the state’s business climate has become “more challenging” under Walz’s government, attributing such to taxation and employment laws.

Harris also recently hired the outgoing U.S. Treasury Department undersecretary for terrorism and financial intelligence, Brian Nelson, as a campaign advisor. During Nelson’s tenure, The Treasury Department sanctioned Tornado Cash and other on-chain privacy tools, brought an enforcement action against the Binance cryptocurrency exchange, and compiled its first risk assessment examining NFTs.

Senator Elizabeth Warren, a notorious crypto industry critic, praised Harris for appointing Nelson to her campaign. “It’s always good to have someone advising our leaders about the threats to national security that come from holes in our anti-money laundering rules,” Warren said.

However, Harris also onboarded David Plouffe, a former adviser to President Barack Obama and former member of the Binance Global Advisory Board — suggesting Harris is open to hearing the perspective of the web3 industry.