Dems Are Being Pushed to Support Crypto for Political Gain
Despite their reservations about the impacts of crypto on consumers and the financial system, Democratic Party operatives and crypto industry advocates are secretly coordinating to push Democratic senators to back the pro-crypto GENIUS Act.
A Bitcoin Accepted Here sticker at a bar in New York City. (Michael M. Santiago / Getty Images)
A private group chat of Democratic Party operatives and crypto industry advocates has been secretly coordinating to push Democratic senators to support major cryptocurrency-friendly legislation up for a vote on Tuesday. In the chat, they admitted that while “Trump’s corruption is manifesting dramatically in crypto,” it would be “political suicide” for Democrats to reject doing the industry’s bidding, even if they have reservations about the impacts on consumers and the financial system.
In the Signal chat, the contents of which were viewed by the Lever, influential Democratic figures noted they “need to win the next election, which means we can not afford to alienate a very vocal and wealthy group of donors.”
To provide political cover for supporting the crypto industry’s legislative giveaway, group chat members suggested pro-crypto allies in the Democratic caucus could introduce symbolic anti-corruption amendments to the final bill prohibiting President Donald Trump and elected officials from profiting from cryptocurrencies knowing the effort would be “DOA,” or dead on arrival, since the language would likely be voted down by Republicans.
According to a new financial disclosure, Trump has so far netted nearly $60 million from the launch of various crypto coins through his company World Liberty Financial. He has also launched his own stablecoin that an Abu Dhabi investment firm plans to invest $2 billion in.
The internal text messages in the chat, named “Dem Crypto Policy Roundtable,” offer a behind-the-scenes look at how crypto interests are working closely with top Democratic Party insiders just three years after the crypto industry was in a free fall amid multiple criminal investigations and popular cryptocurrencies collapsing.
These hidden group chats, whose messages are usually set to disappear after a short time frame, are increasingly becoming a key communication channel between Washington and Silicon Valley, where influence peddling or even undisclosed lobbying may take place outside the confines of mandatory public disclosures.
The main bill that the chat members are pushing for, dubbed the GENIUS Act, is set for a final vote on Tuesday afternoon, and appears poised to pass.
According to critics and Democrats on the Senate Banking Committee, the legislation would inundate the banking system with volatile digital assets that have experienced significant upheaval in recent years.
The GENIUS Act aims to establish a light-touch legal framework for stablecoins, a cryptocurrency designed to hold a stable one-to-one value with the US dollar. However, those assets have collapsed in the recent past after their shaky financial backing led to multiple bank failures.
The bill could even allow social media companies and major brands to create their own currencies, which would force users to pay for online goods and services in a billionaire’s Monopoly money. The bill also includes a special carve-out requiring stablecoin owners to be made whole before other customers in the event of a bank’s insolvency.
But if Senate Democrats oppose the legislation, tech industry representatives in the chat were blunt about the repercussions.
“If Dems bail on this [bill], they will get 0 dollars going forward,” said Avichal Garg, a managing partner at the venture capital firm Electric Capital, which focuses on digital asset technology like cryptocurrency. “It would be political suicide for them not to support it.”
“I Personally Would Stay Away From Crypto”
The Dem Crypto Policy Roundtable group chat includes over a hundred members on both sides of Washington, DC’s revolving door, ranging from venture capitalists, lobbyists, and lawyers for major crypto companies to former Capitol Hill staffers and members of the Democratic National Committee.
Among the more active members of the group is Justin Slaughter, the current vice president of regulatory affairs at crypto investment firm Paradigm, which recently hired a former staffer for Senate Minority Leader Chuck Schumer (D-NY).
Before entering the private sector, Slaughter worked as a staffer at the Securities and Exchange Commission and the Commodity Futures Trading Commission, and on Capitol Hill as general counsel to Sen. Ed Markey (D- MA).
Another member is Sheila Warren, senior global policy adviser at the trade association Crypto Council for Innovation, which has close ties to Schumer’s office. In January 2024, the trade association hired Ryan Eagan, a ten-year veteran from Schumer’s office. Eagan is the council’s top lobbyist for crypto issues so far this year.
In August of last year, Warren hosted a pro-crypto event with Schumer to raise money for former Vice President Kamala Harris’s presidential campaign. At that event, Schumer vowed to pass legislation aiding the crypto industry, which could be accomplished with the passage of the GENIUS Act.
Another active member of the chat is Austin Campbell, a professor at New York University’s Stern School of Business who testified before Congress in February advocating for a more lenient regulatory framework for cryptocurrencies and stablecoins.
The GENIUS Act wasn’t the only legislative priority brought up in the Signal chat. Members also discussed a companion “market structure” bill known as the Clarity Act, which would ensure that crypto is regulated by the Commodity Futures Trading Commission, a fairly weak and understaffed regulatory body, instead of by the far more robust Securities and Exchange Commission, which oversees financial regulation across the economy.
Last month, sixteen Democrats joined with Republicans to advance the GENIUS Act to a full Senate vote now scheduled for Tuesday. But in the past several weeks, the bill’s passage has been held up by backroom negotiations over whether to allow for votes on amendments to the final bill.
One potential amendment would be an anti-corruption measure that would add guardrails prohibiting the president, vice president, members of Congress, and other federal employees from profiting off stablecoins and other cryptocurrencies.
One member of the chat admitted the current bill was rife with loopholes. “I’d rather we stop the actual corruption,” said Will Schweitzer, a pro-crypto Democrat who ran against Sen. Kirsten Gillibrand (D-NY) in the 2024 Democratic primary election.
Jason Gottlieb, a defense lawyer at the New York law firm Morrison Cohen representing crypto companies, responded that regardless of such concerns, Democrats needed to back the legislation to protect their political coffers.
Democrats “need to win the next election, which means we can not afford to alienate a very vocal and wealthy group of donors,” noted Gottlieb.
“The time to do this is now and make fixes later,” said another member of the chat.
Slaughter added that if Democrats tried to kill the bill, it would likely be seen as “[Sen. Elizabeth] Warren and her merry band successfully stopped crypto and showed Dems are against crypto.” A leader of the progressive wing of the Democratic Party, Warren (D-MA) has been a staunch critic of the cryptocurrency industry’s practices and opposes the GENIUS Act.
“It’ll be the end of any efforts to get Dems to be open to crypto,” wrote Slaughter. “What a lot of Dems in the Senate realize is this is their best chance to break away from [Sen. Warren] setting [financial regulation] policy for the rest of the party.”
In the chat, Sheila Warren from the Crypto Council for Innovation acknowledged that corruption and crypto go hand-in-hand.
“The point is that Trump’s corruption is manifesting dramatically in crypto, so if you’re going to campaign on crypto, you can’t ignore that,” she wrote to the group. “If I were an ordinary Dem running in the midterms, I personally would stay away from crypto apart from being vaguely supportive — unless I were on a committee of jurisdiction and have to have a [point of view]. And if the latter, I would flag the corruption and be a pro-crypto anti-corruption candidate.”
One compromise solution some members in the group suggested was for Democratic Senators to offer up anti- corruption amendments to the GENIUS Act, knowing they would likely be for show.
“Anti-corruption language that targets Trump interest[s] will be doa,” said Gottlieb, the defense lawyer for digital asset and blockchain technology companies. “This is what it’s like to be in the minority party across the board, sadly.”
“Nobody is going to get primaried because they voted for GENIUS,” added Warren. “With or without the anti- corruption amendment.”
Others in the chat wrote that corruption didn’t matter to them, outside of how Democrats could use it as a political tool.
“I disagree that the corruption thing matters at all. Everyone knows Trump is corrupt . . . corruption is a red herring,” said Garg, the venture capitalist at Electric Capital.
“Agree,” Warren responded. “But as in any crypto group chat, we love to pretend there is no broader context.”
Some members of the chat grappled with the optics of supporting legislation so clearly aligned with Trump’s crypto allies. “There is a massive group who wants to stand up to Trump in any way, shape, or form,” wrote Schweitzer. “The industry did the wrong thing by aligning with him and you probably know as well as I that many want to bail on him.”
Campbell, the NYU professor, disagreed, saying Democrats who vote against the bill would be seen by voters as “being pro-bank” and that “the idea that you can tie this explicitly to Trump corruption is simply wrong.” Being reflexively anti-Trump, in his view, makes the President’s political position “stronger, not weaker.”
Campbell told the Lever that his thoughts on the matter “are pretty public on Twitter/X,” Elon Musk’s social media site.
Other members of the group chat did not respond to a request for comment before publication, but wrote on the chat that they had been contacted by a reporter.
After that, the tone of some of the chat’s messages shifted. “For the record, Trump is a grifter and so are his sons,” wrote one member. “Print that.”