What Happened?
The cryptocurrency industry was one of the major sources of funding for President Trump’s inauguration. The inauguration raised a record $239 million in donations, with cryptocurrency companies contributing as much as $18 million, marking them as a significant donor group, with Ripple Labs being the second-largest individual donor.
After taking office, the Trump administration implemented several cryptocurrency-friendly policies and actions, even referring to itself as the “pro-cryptocurrency presidency.” The administration not only appointed relevant officials but also authorized the establishment of digital asset reserves and weakened the litigation power of agencies like the SEC against cryptocurrencies.
Most notably, several companies that donated to Trump’s inauguration later saw lawsuits or investigations from the SEC against them being withdrawn or put on hold. Additionally, some companies received IPO or restructuring approvals, business collaboration opportunities, and participation in official summits, raising suspicions about a possible connection between these donations and subsequent policy benefits or regulatory relaxations.
Why Did the Crypto Industry Donate So Generously to Trump?
Documents submitted to the Federal Election Commission (FEC) indicate that President Trump’s inauguration week was among the most extravagant in history, raising a record $239 million in donations, primarily from corporate supporters and executives. Among them, the cryptocurrency industry, which has long been one of Trump’s staunchest supporters, contributed a significant portion, amounting to $18 million.
According to a report by Fortune magazine, these donations came from several cryptocurrency companies and their leaders. Ripple Labs, which has been engaged in a legal battle with the SEC for a long time, donated nearly $4.9 million, becoming the second-largest donor, only behind Pilgrim’s, one of the world’s largest poultry producers, which donated $5 million.
Other major donors include the online brokerage Robinhood, which derives substantial revenue from cryptocurrency trading (donating $2 million), as well as top exchanges like Coinbase, Kraken, and Crypto.com. The recently IPO-seeking stablecoin issuer Circle and the venture giant Paradigm, which is projected to reach near-record asset management levels in 2024, also donated $1 million each.
Although many cryptocurrency companies had previously publicly disclosed their donations to Trump’s inauguration, the FEC documents provide a clearer view of the stark contrast between the cryptocurrency industry and the Biden administration that followed.
At that time, the SEC conducted extensive crackdowns on the cryptocurrency industry, alleging that most cryptocurrencies were securities subject to strict disclosure requirements. Faced with a barrage of lawsuits, executives from the cryptocurrency industry 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 “pro-cryptocurrency president,” attracting support from industry leaders. Upon returning to the White House, the Trump administration implemented cryptocurrency-friendly policies, including appointing a director for artificial intelligence and cryptocurrencies, authorizing the establishment of strategic Bitcoin and digital asset reserves, and weakening the litigation units within the Commodity Futures Trading Commission (CFTC), SEC, and Department of Justice targeting cryptocurrencies.
Notably, since Trump took office, the SEC has withdrawn or put on hold several lawsuits or investigations against companies that had provided donations, including Coinbase, Crypto.com, Uniswap, Yuga Labs, Kraken, and Ripple.
Reports indicate that nearly all of these donating companies appear to have “directly or indirectly” benefited from the Trump administration. In addition to the aforementioned legal actions being withdrawn, benefits include:
- IPO and restructuring approvals: Circle successfully went public after stating that Trump’s administration made its IPO possible; Galaxy Digital received SEC approval for its significant restructuring, a key step for its Nasdaq listing.
- Business collaborations: Companies like Crypto.com and ONDO reportedly established direct financial partnerships with businesses linked to the Trump family.
- Policy incorporation: Ripple’s CEO 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 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 circumstances have led to speculation about a potential connection between donations and subsequent policies and business interests, with some industry KOLs and community members believing that many actions taken after Trump’s inauguration could undermine public trust in the cryptocurrency industry.
Although some accusations may lack substantial evidence, under Trump’s administration, the cryptocurrency sector has indeed undergone significant changes, for better or worse.
References: Fortune, beincrypto