Crypto leaders meet with Biden adviser, lawmakers to address regulatory tensions

Heavy hitters from the $2 trillion cryptocurrency industry met with a senior White House official in Washington D.C. on Wednesday to voice their frustration about the Biden administration’s regulatory crackdown on the industry and whether their fraught relationship can be mended.

The event was held at the Willard hotel, located within walking distance of the White House. It was hosted by a pair of prominent Democrats, California Congressman Ro Khanna, who represents a district that includes the uber-rich Silicon Valley tech enclave, and billionaire tech entrepreneur Mark Cuban, a crypto investor and advocate.

CRYPTO INDUSTRY CHEERS BOWMAN LOSS, CURTIS VICTORY IN KEY ELECTION PRIMARIES

The exclusive invite-only meeting of around thirty people included prominent Democrat politicians: Congressman Joe Neguse (D-Colorado) and Senator Kirsten Gillibrand (D-New York); Ripple CEO Brad Garlinghouse; SkyBridge Capital chief Anthony Scaramucci; prominent former hedge fund manager and crypto investor Mike Novogratz and officials from major crypto firms and trade groups.

Anita Dunn, a senior adviser to President Biden, attended the meeting as well, but another invitee, White House chief of staff Jeff Zients, didn’t attend. Dunn spoke briefly, acknowledging that dialogue with the industry has not been as productive as it could be. She then listened to attendees criticize the administration’s treatment of digital assets and how the Securities and Exchange Commission’s myriad of enforcement actions is harming businesses and stunting market competitiveness.

One attendee described Dunn as seeming "genuinely surprised" by the descriptions of the SEC's actions. 

If the meeting was designed to mend fences between crypto advocates and the Biden White House, it’s unclear whether it achieved its goal. 

"You guys suck on crypto," one attendee told Dunn in an exchange that was described to FOX Business as "respectful but blunt." 

"I’m a lifelong Democrat, but you guys have really got this one wrong," another attendee said.

IS TRUMP LAUNCHING A CRYPTO TOKEN? INDUSTRY SCRUTINIZES 'TRUMP COIN'

Biden’s GOP challenger, Donald Trump, has been courting the industry for votes and campaign contributions with some success amid the administration’s regulatory crackdown. The Winklevoss twins of Facebook fame and founders of the crypto exchange Gemini contributed around $1.7 million to Trump's campaign to support him in his stated mission to "end Biden’s war on crypto" and take a lighter regulatory approach than the current White House occupant and his chief financial regulator, SEC Chairman Gary Gensler.

Khanna didn’t immediately return requests for comment from Fox Business, but Cuban described the meeting as advantageous to both sides.

"I think it went well," Cuban said in an email. "The right people from the Senate, House and WH (White House) were there. I think we will see changes in how the Biden WH and the Dems in general support crypto."

Cuban has been a vocal critic of the SEC since it accused him of insider trading in 2004 when he avoided a loss of around $750,000 by selling his shares in a Canadian internet company. He was cleared of the charges in 2013 and has publicly campaigned against the agency ever since. According to two attendees, Cuban told the room at large at the end of the meeting: "You all have permission to quote me saying that Biden should fire Gary Gensler."

A few others interviewed by Fox Business agreed with Cuban’s assessment that participants effectively delivered their message of frustration to Dunn and the Biden White House.

Some attendees criticized the White House’s decision to re-nominate the anti-crypto SEC Commissioner Caroline Crenshaw, a Democrat who voted against the agency’s approval of the launch of eleven bitcoin spot ETFs in January. 

Gillibrand, meanwhile, explained the regulatory complexities of digital assets, including the dispute between the SEC and its sister agency, the Commodity Futures Trading Commission, over who should have jurisdiction to regulate the $2 trillion crypto market. She also took the opportunity to tout her new stablecoin legislation with GOP Senator Cynthia Lummis (R-Wyoming) as an important example of why the crypto industry needs proper regulation.

Dunn made it known that while she is not a policy person, she would be sure to bring industry’s concerns back to the White House and follow up on the conversations.

COINBASE SUES SEC, FDIC FOR INFORMATION RELATING TO CRYPTO REGULATION

"Her tone, demeanor and her body language told me that she was taking this seriously and really engaging with what people were saying," Crypto Council for Innovation president Sheila Warren told FOX Business. "She was definitely eager to learn more."

"I was much more optimistic walking out than I was walking in," Coinbase’s Chief Legal Officer Paul Grewal said. "I think it’s a sign of progress that Anita Dunn came, even as she’s dealing with the NATO Summit and a very tense period in the Biden campaign."

Attendees also tell FOX Business it’s clear that Democrats who attended know they’re playing catch up in attracting crypto support to the Biden campaign, which finds itself in the middle of an existential crisis following the president’s disastrous debate performance against Trump last month.

"The Republicans are playing chess and the Democrats are playing checkers," said one attendee who wished to remain anonymous. "There's no voting upside to being anti-crypto."

GET FOX BUSINESS ON THE GO BY CLICKING HERE

While most attendees agree the meeting with Dunn was an important first step towards a more positive dialogue between the crypto industry and the Biden administration, they expressed that the ball is now in the White House’s court.

"Words are easy, action is hard but necessary," said Ripple CEO Brad Garlinghouse in a post on X. "Choose wisely. Voters are paying attention."