Biden Admin Opens Line with Crypto Industry Amid Frosty Relations

The Biden administration toed a line with the cryptocurrency industry on Wednesday as the White House and Democrats find themselves increasingly at odds with powerful players in the digital asset space.

Anita Dunn, senior advisor to President Biden, met with dozens of crypto leaders in her personal capacity on Wednesday at a roundtable hosted by crypto-friendly Democratic Rep. Ro Khanna (Calif.).

Khanna was also joined by Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Joe Neguse (D-Colo.), as well as billionaire Mark Cuban, who supported Biden’s re-election bid but also criticized his administration’s approach regarding encryption.

Several people in attendance called the meeting “productive” and praised the California Democrat for organizing the roundtable.

“I really give a lot of credit to Congressman Khanna for bringing together about 30 or maybe more industry leaders to have a chance to engage directly with Ms. Dunn and, by extension, the White House,” said Paul Grewal, chief legal officer from the popular crypto exchange Coinbase.

“It was clear that those in attendance understand the importance and opportunity that crypto offers,” said Sheila Warren, CEO of the Crypto Council for Innovation.

“I left feeling hopeful about future conversations and even more committed to championing the promise of this innovative technology to transform systems,” she added in a statement.

Grewal described the meeting as a “watershed moment” for the Biden administration to reverse its “almost uniformly hostile stance” toward encryption as Republicans and former President Trump embrace the industry.

“We are at a turning point, with Republicans fully embracing encryption, literally incorporating it into their platform for the upcoming convention in very specific, concrete terms,” he told The Hill. “So I think the government has a choice to make at this point.”

The Republican Party released its official platform on Monday ahead of next week’s Republican National Convention, arguing that the party will ease restrictions on emerging industries such as cryptography and artificial intelligence (AI).

“Republicans will end Democrats’ illegal and anti-American crackdown on crypto and oppose the creation of a Central Bank digital currency,” the platform says. “We will defend the right to mine bitcoin and ensure that all Americans have the right to self-custody of their digital assets and conduct transactions free from government surveillance and control.”

The Biden administration, on the other hand, has been widely considered inhospitable to the industry. In particular, the Securities and Exchange Commission (SEC) has been criticized by crypto companies for being overzealous in its enforcement.

“Unfortunately, most Democrats continue to allow [SEC Chair Gary] Gensler’s illegal war on crypto — sabotaging the ability for American innovation to thrive,” wrote Ripple CEO Brad Garlinghouse in a post on Platform X following Wednesday’s roundtable.

“No wonder the Republican Party announced a pro-crypto stance,” he continued. “Gensler will be considered the Luddite of his time. Words are easy, actions are difficult, but necessary. Choose wisely. Voters are paying attention.”

Others in the crypto space have also warned about the potential political consequences of Democrats’ current stance on the industry.

“We are concerned that the administration has, up until this point, operated based on a misunderstanding of the politics of the issue,” Grewal said.

“I think maybe there was a sense that somehow going after the crypto industry would be something that constituents that the government cares a lot about would root for,” he continued.

“But if you talk to young people, if you talk to people from communities of color who disproportionately participate in crypto,… they see an attack on crypto as an attack on them,” Grewal added.

Cuban suggested in May that Gensler’s crypto approach could cost Biden the election.

“If @joebiden loses, there’s a good chance you’ll be thanking @GaryGensler and @NewYork_SEC,” Cuban wrote on X. “Crypto is a mainstay among younger, independent voters.”

“This is also a warning to Congress,” he added. “Crypto voters will be heard in this election.”

Some Democratic lawmakers have broken ranks with the administration over encryption and supported Republican-led legislation.

In May, 71 House Democrats joined a majority of Republicans to pass the Financial Innovation and Technology for the 21st Century Act (FIT 21), which established a new framework for crypto regulation between the SEC and the Commodity Futures Trading Commission. (CFTC).

Gensler spoke out against the legislation, arguing that it would “create new regulatory loopholes and undermine decades of precedent.” Although the White House stated that it also opposed FIT 21 due to its lack of “sufficient protections for consumers and investors,” it did not expressly threaten to veto the bill.

However, Biden vetoed a House resolution that sought to undo an SEC crypto rule. More than 20 Democrats, including Khanna, supported an unsuccessful attempt to override the president’s veto on Thursday.

This story originally appeared on thehill.com read the full story