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Donald Trump is<\/span> cleaning up on crypto, disclosing a $1.4 billion<\/a> windfall last week. Yet cryptocurrencies like Bitcoin have, after a year of flying high in the wake of Trump\u2019s election, plummeted.<\/p>\n The crypto industry is putting hopes for its revival in a long-awaited bill, under debate in the Senate, called the Clarity Act, which could open the doors to Wall Street investments.<\/p>\n But there is one thing ironically standing in its way: Trump\u2019s giant crypto haul<\/a>.<\/p>\n The naked self-enrichment has turned crypto into a prime example<\/a> of presidential corruption.<\/p>\n The result is that even crypto\u2019s most staunch Democratic allies will find it hard to back a crypto wishlist like the Clarity Act, which will need support from at least seven Senate Democrats to overcome a filibuster.<\/p>\n Take crypto stalwarts<\/a> like centrist Sen. Kirsten Gillibrand, D-N.Y., the chair of the Democratic Senate Campaign Committee, who issued a statement<\/a> demanding that any crypto bill include ethics provisions to stop Trump\u2019s crypto profiteering.<\/p>\n With the industry poised to spend tens of millions more<\/a> on the midterm elections<\/a>, however, Gillibrand and other centrist Democrats may yet be tempted to sign off on window dressing instead of a crackdown, said crypto critics.<\/p>\n \u201cSen. Gillibrand and too many of her colleagues prioritize and spend enormous time pushing crypto\u2019s special interest agenda, which is to get legitimized by the weakest possible law and regulated by the smallest, most underfunded, least capable, and most capture-able financial regulator,\u201d Dennis Kelleher, the CEO of the nonprofit Better Markets, said in a statement<\/a> last Monday. \u201cThat is presumably because the crypto industry has spent hundreds of millions of dollars in campaigns to buy friends and attempt to get crypto\u2019s special interest agenda enacted.\u201d<\/p>\n Gillibrand has dismissed those criticisms. In a statement of her own last week, she expressed her desire to both advance the bill and crack down on Trump.<\/p>\n \u201cWe cannot let self-dealing destroy an opportunity to strengthen consumer protections, crack down on illicit finance, and expand economic opportunity for the millions of Americans our financial system has left behind,\u201d Gillibrand said. \u201cThe time to act is now \u2014 and that must include ethics reforms that prohibit members of Congress, the president, and their spouses from cashing in on their office.\u201d<\/p>\n For crypto, the numbers are sobering. Bitcoin soared from roughly $60,000 just before Trump\u2019s election to about twice that by October of last year. Since then, it and other digital assets have cratered. Bitcoin now trades back around $63,000 a token.<\/p>\n The market\u2019s gyrations did not stop Trump and his family members from profiting handsomely off the $TRUMP meme coin<\/a> and other ventures. His roughly $1.4 billion of crypto profits last year meant that he cleared more than the largest publicly traded company in the industry, Coinbase, according to crypto commentator Scott Melker<\/a>. The White House has defended Trump\u2019s crypto windfall as legal, a point even his critics concede is likely true.<\/p>\n Crypto\u2019s fortunes now appear to hinge largely on whether Congress passes the Clarity Act, which is intended to create an overall regulatory framework for the industry.<\/p>\n \u201cSo much of crypto rides on sentiment.\u201d<\/p>\n<\/blockquote>\n<\/figure>\n \u201cIf the bill passed, you would probably see a bump for the industry,\u201d said Mark Hays, the associate director for cryptocurrency and financial technology at Americans for Financial Reform and Demand Progress. \u201cSo much of crypto rides on sentiment, and if the bill were passed and signed into law, you would likely see an increase in prices just based on that sentiment alone.\u201d<\/p>\n One sign of how much of the industry is placing its bets on Congress came in a recent quarterly earnings call held by Coinbase. Analysts asked the company\u2019s executives several times how the Clarity Act would affect their bottom line. The company\u2019s executives said that it could mean that Wall Street, which has been reluctant to dive headlong into the industry, will finally start to spend on crypto.<\/p>\n Passing the law, Coinbase CEO Brian Armstrong said<\/a>, would \u201cjust unlock a lot of institutional capital that\u2019ll flow into the space broadly.\u201d<\/p>\n That is one of the outcomes that crypto skeptics fear most. If crypto becomes integrated with the economy rather than a speculative sideshow, they say, it risks taking down the entire system in a crash.<\/p>\n <\/p>\n The only thing standing between crypto and its top priority are Senate Democrats. The House of Representatives, where crypto needs only a bare majority, already overwhelmingly passed last year a version of the Clarity Act with Democratic support. In the Senate, however, there are enough Democrats to block passage of the law with a filibuster. The question is whether they will.<\/p>\n Crypto needs to win over seven Democrats to beat a filibuster, or eight if Sen. Mitch McConnell, R-Ky., remains absent due to illness.<\/p>\n Progressives such as Sen. Elizabeth Warren<\/a>, D-Mass., have expressed broad concerns that the law could lead to the next financial crash. Centrists like Gillibrand, meanwhile, have voiced narrower concerns. One of their biggest hang-ups with the legislation, they say, is the question of whether it will rein in Trump\u2019s crypto ventures.<\/p>\n Gillibrand occupies a powerful position in the party: She serves as the caucus\u2019s top fundraiser as chair of the Democratic Senatorial Campaign Committee. And she has positioned herself as a leader in Clarity Act negotiations, despite not serving on the relevant committees.<\/p>\n Asked last month about the negotiations over the bill at the Aspen Ideas Festival \u2014 a cozy gathering of politicos and business executives in the Colorado mountain town \u2014 Gillibrand said she was working hard to overcome the ethics obstacle.<\/p>\n \u201cWe\u2019re working hand in glove with Republicans,\u201d Gillibrand said<\/a>. \u201cWe\u2019re negotiating with staff from the White House so that everyone is clear about what the bill is going to say, and we\u2019re going to do our best to land that plane.\u201d<\/p>\n Gillibrand\u2019s public statements have repeatedly telegraphed her desire to see some version of the legislation passed. Gillibrand says it is urgent to get consumer protections on the books. Observers say the urgency may also be motivated by the industry\u2019s massive campaign war chest<\/a>.<\/p>\n Over one-third of the corporate money spent on this year\u2019s elections so far has come from the crypto industry, according to a recent report from the nonprofit watchdog group Public Citizen<\/a>. That amounts to $189 million, including $82 million routed through a single industry super PAC called Fairshake<\/a>, which is backed by Coinbase.<\/p>\n Rick Claypool, the research director for Public Citizen\u2019s president\u2019s office, said that as chair of the DSCC, Gillibrand is keenly aware of crypto\u2019s campaign spending potential.<\/p>\n \u201cI\u2019m sure it\u2019s top of mind,\u201d Claypool told The Intercept. \u201cPart of the whole goal of the corporate crypto spending is to make sure that lawmakers in general, but also in particular those who are in fundraising, leadership positions, think of the industry before they think of voters.\u201d<\/p>\n Other Democrats tipped as maybes on the bill include Sen. Angela Alsobrooks of Maryland and Ruben Gallego of Arizona, who last month nudged<\/a> other Democrats on the banking committee to vote for a draft of the bill, along with a swath of the caucus\u2019s more centrist members.<\/p>\nDeclining Sector Hangs Hopes on Clarity Act<\/strong><\/h2>\n
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Democrats Holding the Keys<\/strong><\/h2>\n