What Happened?
The cryptocurrency industry was one of the major sources of funding for President Trump’s inauguration, which raised a record $239 million in donations, with cryptocurrency companies contributing as much as $18 million, making them an important donor group. Among these, Ripple Labs was the second-largest single donor.
After Trump took office, his administration implemented several crypto-friendly policies and actions, even labeling him as the “crypto president.” His government not only appointed dedicated officials but also authorized the establishment of digital asset reserves and weakened the litigation power of agencies like the SEC against cryptocurrencies.
Notably, several companies that donated to Trump’s inauguration later saw investigations or lawsuits from the SEC against them being withdrawn or shelved. Additionally, some companies received approvals for IPOs or restructuring, business collaboration opportunities, and participation in official summits, raising questions about potential connections between these donations and subsequent policy benefits or regulatory relaxations.
Why Did the Crypto Industry Generously Donate to Trump?
According to documents submitted to the Federal Election Commission (FEC), President Trump’s inauguration week was the most luxurious in history, garnering a record $239 million in donations, primarily from corporate supporters and high-level executives. The cryptocurrency industry, a long-time staunch supporter of Trump, contributed a substantial portion amounting to $18 million.
As reported by Fortune magazine, these donations came from various cryptocurrency companies and their leaders. Ripple Labs, engaged in a long-standing legal battle with the SEC, donated nearly $4.9 million, becoming the second-largest donor after Pilgrim’s, one of the world’s largest poultry producers, which donated $5 million.
Other major donors included the online brokerage Robinhood, which made $2 million from cryptocurrency trading, and top exchanges like Coinbase, Kraken, and Crypto.com. Additionally, the recently IPO-applying stablecoin issuer Circle and venture capital giant Paradigm, which is expected to see its asset management scale soar to near record highs in 2024, each donated $1 million.
While many cryptocurrency companies had previously disclosed their donations to Trump’s inauguration, the FEC documents provide clearer insight into the stark contrast between the cryptocurrency industry under Trump and under former President Biden’s administration. During Biden’s tenure, the SEC aggressively targeted the cryptocurrency industry, alleging that most cryptocurrencies were securities subject to strict disclosure requirements. Faced with a series of lawsuits, cryptocurrency executives accumulated substantial funds, spending over $130 million to influence congressional elections and support pro-cryptocurrency candidates.
Did the Cryptocurrency Industry Receive “Policy Dividends”?
During the campaign, Trump positioned himself as the “crypto president,” attracting support from industry leaders. After returning to the White House, the Trump administration implemented crypto-friendly policies, including appointing an overseer for artificial intelligence and cryptocurrencies, authorizing the establishment of strategic Bitcoin and digital asset reserves, and weakening the litigation units targeting cryptocurrencies within the CFTC, SEC, and the Department of Justice.
Notably, since Trump took office, the SEC has withdrawn or shelved lawsuits or investigations against several companies that made donations, including Coinbase, Crypto.com, Uniswap, Yuga Labs, Kraken, and Ripple.
Reports indicate that almost all these donating companies seem to have “directly or indirectly” benefited from the Trump administration. In addition to the aforementioned legal actions being withdrawn, benefits included:
- Listings and restructuring approvals: Circle successfully went public after stating that Trump’s administration made its IPO possible; Galaxy Digital received SEC approval for a significant restructuring, which was a crucial step for its Nasdaq listing.
- Business collaborations: Companies like Crypto.com and ONDO reportedly established direct financial partnerships with Trump-related businesses.
- Policy inclusion: The CEO of Ripple had previously anticipated a cryptocurrency bull market during Trump’s term, and the tokens of the three major donors—Ripple (XRP), Solana, and Cardano—were later included in the announcement of the U.S. cryptocurrency reserves.
- Participation in summits: Donors like Multicoin and Paradigm were invited to Trump’s cryptocurrency summit, while more well-known organizations like the Ethereum Foundation were not invited.
These situations have led to speculation about possible connections between donations and subsequent policies and business interests, with some industry KOLs and community members suggesting that many of Trump’s actions after taking office might undermine public trust in the cryptocurrency industry.
While some allegations may lack substantive evidence, it is undeniable that significant changes—positive or negative—have occurred in the cryptocurrency space under Trump’s administration.
References: Fortune, beincrypto