The cryptocurrency industry is flexing its political muscle, and a former SEC lawyer is sounding the alarm. Beth Kindig, a leading tech analyst at I/O Fund, has drawn a stark comparison between restrictive crypto policies and attempts to stifle major advancements in the past. In a recent interview with Fox Business, Kindig likened current regulatory efforts to “stifling electricity because they had a stake in oil lamps.”
Kindig argues that the government’s approach to crypto regulation reflects “self-serving motives” rather than a genuine understanding of the industry’s potential for innovation. To protect this potential, the crypto industry has ramped up its political spending, reaching unprecedented levels in the 2024 US election cycle. According to recent Federal Election Commission filings, crypto companies have contributed over $200 million, making the industry the largest corporate donor for the election.
“The crypto community is saying, let’s focus on policy… let’s get some money and let’s back the right candidate,” Kindig explained, highlighting the industry’s push to support politicians who favor pro-crypto policies. This effort has seen significant contributions to both sides of the political aisle, with prominent figures receiving backing from within the crypto world.
Vice President Kamala Harris has garnered support from prominent figures like Ripple’s Chris Larsen and Coinbase backer Vinod Khosla. On the other side, former President Donald Trump has received backing from Tether advocate Howard Lutnick and the Winklevoss twins. Political action committees (PACs) have also amplified the industry’s voice, with crypto-backed PACs like Future Forward raising substantial funds for Harris’s campaign. Meanwhile, a Trump-affiliated super PAC reportedly raised over $7.5 million in crypto donations.
Despite this growing political influence, Kindig remains critical of the government’s current stance on crypto. “The government is trying to stifle innovation,” she emphasized, advocating for clear and constructive policy decisions. She warned that failing to address the regulatory climate could hinder technological adoption and undermine American leadership in the financial sector.
The importance of crypto’s role in the US financial landscape will be a key topic at Benzinga’s Future of Digital Assets event on November 19. Industry leaders are expected to discuss crypto regulation, innovation, and policy trends, providing further insights into the evolving relationship between the crypto industry and the government.
