A US Congressman named Warren Davidson has introduced a bill to reform the Securities and Exchange Commission (SEC), that powerful US government institution that regulates and governs the business of conceiving, structuring, distributing, and selling the investment instrument you define as “protection.” The committee is currently chaired by a controversial and divisive colleague named Gary Gensler, who was Barack Obama’s chief financial officer and tapped for the role by President Joe Biden. The same fellow who has put his boot on the neck of cryptocurrency since his appointment, causing the air supply to be cut off.
Rep. Davidson, a Republican, now has a bill before Congress called the SEC Stabilization Act, an angry response to the SEC’s perceived omnipotence and wrongdoing. It is described as a reform package, a set of brakes to apply to government overreach. In a recent tweet, he said: “American Capital Markets must be protected from a tyrannical president, including the current one. It is time for real reform and remove @GaryGensler as SEC Chairman.”
Oh, and he’s also wearing a button around town that says, “Fire Gary Gensler.”
Therein lies a fascinating techno-political story.
The original pioneers of what is now widely referred to as cryptocurrency began as a group of deep math nerds in the 1970s who gradually unearthed some of the pesky problems that had long puzzled cryptozoology researchers. This curious and coarse group of intellectuals was not known for their political party loyalties, although many were vaguely libertarian, wanting the freedom to pursue their interests without the egregious intrusion of the real world.
They were of all stripes, but they were mostly left-leaning (as I can tell best) and sometimes suspicious of the government and its sometimes uninformed delegates. As is often the case, they were simply not interested in politics. However, one must assume that the more interested they were in politics the more they were actually drawn to the prospect of building a monetary system outside the control of governments, as early contacts among the group suggest. They were political in a sense, but not as in Democrats vs. Republicans. They tended to float above that, their heads deep in the cryptographic mysteries of secrecy-keeping, digital security, and monetary modeling.
Not anymore. The crypto narrative has been taken over by dark forces within culture and politics.
Since Bitcoin popped its little head out of the womb in 2010, the whole topic of digital currencies has been very quickly absorbed into the American culture wars. The GOP cites attempts to regulate cryptocurrency as an example of the radical nanny state and the radical left, while Democrats have touted some public cryptocurrency scams as a reason why regulation is necessary to derail the basic instincts of the free market.
Nonsense, of course – these are just simple slogans. I’ve been in the space for a very long time, spending half a day reading about the personalities, currents, and eddies surrounding cryptocurrency, NFTs, DeFi, Web3, GameFi, and the metaverse. Their fanatics, followers, and sharers vary widely across the political spectrum and there are good guys and bad guys in this area, just like anywhere else.
Arguments between the two cultural poles are bitter and irrational. Gensler himself said on CNBC: “We don’t need any more digital currencies. We already have a digital currency. It’s called the dollar.” But his opinion on the matter is irrelevant — it’s not his job to weigh in on whether or not we need another digital currency, and this quote illustrates his bias. In the democratic narrative, the world of crypto is a hotbed for criminals. And the flip side is that all crypto-skeptics are communists.
Take Elizabeth Warren, the Democratic senator from Massachusetts, for example. She has built the entire campaign on its opposition to cryptocurrency (see image). On the flip side, Republican presidential candidates Florida Governor Ron DeSantis, Miami Mayor Francis Suarez, and businessman Vivek Ramaswamy are saying nice positive things about Bitcoin. Crypto-singing praises is what they do on the trunk, their claims of “freedom” (a well-known right-wing trope) tightly tied to a citizen’s freedom to evaluate, buy, and sell anything they desire, without government oversight. Surprisingly, there is some deadly snipe, which Ramaswamy claims to know a lot More on encryption than on DeSantis.
What is all this about? About 50 million Americans have previously traded or now own some type of cryptocurrency. You don’t want to upset a constituency of that size. The Republican leadership is certainly aware of this fact. The whole “freedom” rap seems a bit disingenuous and I’m not lost that the GOP was fiercely anti-cryptocurrency not too long ago. Even Donald Trump said, with credible ignorance, in 2021: “Bitcoin, looks like a scam.” No, these 50 million voters are behind.
And what about anti-crypto Democrats? Well, they screamed about consumer protection and the rape of the toiling middle class by the tech elite. This is also disingenuous – most cryptocurrency investors are just regular folk, and fraudulent activity is a very small percentage of the crime that takes place in the real finance world, much smaller as a percentage of illicit activity in general. What they really fear is that money will escape from the control of the state, and this will cut off the big snake of financial regulation. This is of course true to some extent.
So I will hang my colors on the mast. I’m a bit of a left-of-center crypto enthusiast, and I think Gary Gensler should really be fired. But I still wouldn’t vote Republican.
Stephen Boyke-Sedley is Professor of Practice at JBS, University of Johannesburg. his new book, It’s Mine: How the Crypto Industry is Reinventing Ownership, It will be published in August.