Scott Sutherland’s Post

The Crypto Bros Are Taking Over Politics https://buff.ly/4dX42De Crypto companies have spent over $121 million to sway elections during this cycle. By comparison, since the Citizens United ruling in 2010, the fossil fuel industry has collectively spent $176 million over 14 years of election cycles.

From The Wall Street Journal: "Will RFK Jr. Swing the Election to Biden? -- By Karl Rove | Commentary". Discuss. I understand people's reluctance to talk politics at cocktail parties or on social media but, as you can probably tell, I have a different opinion on the matter. I think politics affects us all in meaningful ways, particularly in our jobs, and the impact sometimes is bigger than people think. My general view about the fall is there are all sorts of hugely important topics: the economy, foreign affairs, student loans, health care, women's rights. Each one of those items can turn any person into a single issue voter, and I respect that. For me, the topic that is front and center is what to with enabling technology and how to grow it here at home and, more specifically, what to with crypto. I've spoken to numerous attorneys, bankers, and CEO start ups in recent weeks & their candid, off-the-record comments about the regulation of digital assets are pretty harsh. Simply, these people say: we're killing a nascent industry and sending it overseas because we are using outdated securities laws written - literally - before and during WWII. We're talking 50 years before personal computers even became a thing. Square hole; round peg. It ain't working. To that end, I am focused on the comments on the campaign trail about crypto. In various forms, I have been involved in the space for 7 years. I think blockchain technology can & will change the world and, no, I don't think meme coins add any value, but then again, maybe they do. It's not for me to decide, and more broadly, I don't think our government should be in the business or picking winners or losers, either. I am for, then, any candidates who lay out a coherent strategy for blockchain, digital assets or crypto. So far, we have seen: Mr. Trump: In Favor Mr. Kennedy: In Favor President Biden: In Favor Ms. Stein: Unclear Mr. West: Unclear My reading of 3rd party candidates is this: Ross Perot got a lots of votes & influenced debates in a big way, but Bill Clinton would have won no matter what. Ross Perot, in the end, didn't matter in 1992. Eight years later, an independent candidate changed history. Ralph Nader only got a few hundred thousands but where he got them impacted the outcome of the election. Specifically, he got lots in Florida that all but certainly would have gone to Al Gore had he not run. Ralph Nader cost Al Gore the infamous chad vote election that George Bush II won. To Karl Rove's question at the top: the answer is an unambiguous yes. RFK Jr. could have a huge influence on the November election. Pro crypto people who don't support Donald Trump could find a home in his candidacy. Those votes would likely come at the detriment of POTUS. And, as with Mr. Nader, you don't need 19% of the vote like Ross Perot had to upset the apple cart in Washington. I'm going to leave Comments on. Any vitriolic remarks towards any of the candidates or either party will be deleted by me.

WHAT IS 🇺🇸 TO ME? (OR: THE HOUSE I *DO NOT* LIVE IN) IS THE BEST REALLY YET TO COME? What is 🇺🇸 to me? Sinatra sang it as more than a place — a legacy of people and a democracy-driven society. Today, w/ democracy in focus (I guess Trump won?) — as a Brazilian in Belfast (now a few days in Austria), I wonder — what is *real* democracy & how secure is it? Back in ’20, Trump said: “the best is yet to come”; strong metrics back then: 7M jobs, record-low Afro-American youth unemploy’t, a 70% stock surge adding $12T (source: https://lnkd.in/emceWY32). But, now in ’24 — his return raises (for me, at least): what does his comeback mean for a democracy he argued was flawed? What of Bolsonaro, still ineligible? And Zelenskyy? Trump & Bolso both raised transparency doubts — an issue for both 🇺🇸 & 🇧🇷. 🇺🇸 faced mail-in ballot skepticism in ’20; 🇧🇷’s fully digital system has critiques; in ’21, the Capitol was stormed; in ’23: Brasília saw a similar playbook. Politics shaped (my) life: mum worked w/ 3 🇧🇷 ministers: #1 enabled generics 💊 in 🇧🇷, a public health milestone; #2 (Clean City Law) removed all public outdoor ads in SP, hitting ad industry (measures can harm when enacted w/o phases); #3 focused on tourism — vital but underused; safety, high costs in BRL & RJ’s “🥥 mafia” deter locals & foreigners. My father (software dev) valued transparency. So why not use blockchain in elections? The tech behind BTC (market cap > JP Morgan’s) could guarantee open, verifiable elections. 🇧🇷 has world-class devs who could innovate. This raises another Q: did STF involvement in 🇧🇷’s vote audit shift its direction? Before Barroso, audit momentum seemed strong, but it changed after. When TSE hinted voters could take “receipts” home — was this misinfo? The OG proposal didn’t involve ‘voting receipts’; one might ask: could anyone funded for anti-misinfo risk spreading it? this isn’t an accusation — it’s just a prompt for reflection. 🇧🇷 also stands alone among 193 UN nations w/ a Supreme Electoral Court (TSE) where members earn dual salaries (TSE+STF). Should unelected officials shape the vote & lead anti-misinfo campaigns? Respect for authority is key to me; I’m an expatriate who chose to live abroad (3x), twice in the UK and once in Poland. 🇺🇸 military swear to obey POTUS; the Oath says: “I’ll support & defend the Constitution against all enemies… foreign & domestic…” (sources: army.mil/values/oath.html, https://lnkd.in/eKpiBi4r). This aligns w/ my b-day, Oct 5 — date the oath was updated in ’62 & 🇧🇷’s Constitution was promulgated in ’88. In democracy, Qs matter & must be shielded w/ transparency; blockchain voting could address these needs. Sinatra’s 🇺🇸 was an ideal (not ‘utopia’) — not just a place, but a shared dream (like in Raul Seixas’ Prelúdio); Trump’s ’20 message said: “the best is yet to come”… Can this promise be realized for everyone in democracy, tech & transparency? 🌍

. Happy Monday! With the elections last week, it was undoubtedly a significant win for the crypto industry. Now, we need to pay attention to who gets nominated for key roles in the administration, with the SEC being a primary focus for those in the crypto and blockchain sector. I like to call it a game of musical chairs. The President nominates the SEC Chair, but that nomination also needs to be approved by the incoming Chairman of the Senate Banking Committee, Tim Scott (R-SC), along with the Senate Majority Leader. With Mitch McConnell stepping down, Senators Thune, Cornyn, and Scott from Florida are competing for the leadership role, which introduces some uncertainty until the Senate Republican Conference votes on its leadership. In the meantime, the Trump team is likely to appoint one of the Republican Commissioners—either Hester Peirce or Mark Uyeda—as the Acting SEC Chair. Below, you will find information from Bloomberg regarding the names being considered. #Crypto #Blockchain #SEC #Elections #Senate #Leadership #HesterPeirce #MarkUyeda #PoliticalUpdates #FinanceNews Insert Farley, Champ Among Candidates to Succeed Gensler as SEC Chair Richard Farley, a partner at Kramer Levin Naftalis & Frankel, and Kirkland & Ellis partner Norm Champare among contenders to replace Gary Gensler as chair of the US Securities and Exchange Commission, according to people with knowledge of the matter. Robinhood Markets Inc. legal chief Dan Gallagher, current SEC Commissioner Mark Uyeda and Heath Tarbert, a former chairman of the Commodity Futures Trading Commission, are also among those being considered for the job, said other people with knowledge of the matter, who asked not to be identified because the information isn’t public. Also in contention are former SEC Commissioner Paul Atkins and Robert Stebbins, a partner at Willkie Farr & Gallagher, some of the people said. Members of President-elect Donald Trump’s transition team and other advisers began talks with potential candidates following Tuesday’s election, some of the people said. Discussions are ongoing, and a candidate may not be chosen for weeks. No matter Trump’s choice, the next SEC chief is likely to scrutinize the major Gensler-era rules still pending or not yet in effect and seek less regulation for the digital-asset industry to comply with securities laws. Farley, Champ and Uyeda declined to comment. Atkins, Stebbins, Tarbert and Gallagher didn’t immediately reply to messages seeking comment. Gensler was nominated by President Joe Biden in February 2021 and was sworn in two months later. His term ends in 2026, and he hasn’t said whether he’ll step down when Trump takes office. Reuters reported earlier that Gallagher, Atkins and Stebbins are being considered for the job. The New York Post reported earlier on Farley.

From tax policy to private market regulation, the 2024 election results will have huge implications for funds and small businesses. Join Anthony Cimino and Holli Heiles Pandol from the Carta Policy Team on Wednesday, November 20 at 10am PT / 1pm ET for a deep dive into how a second Trump administration and GOP Congress will shift governing dynamics and the policy landscape and its impact on the private market ecosystem. The session will explore: ✔ Key policy areas to watch in 2025, including tax reform, capital market regulation, and emerging technologies like crypto and AI ✔ How PE and VC funds and small businesses can navigate the changing political landscape ✔ How Carta and others are working with policymakers to shape the policy debate Get a look at what’s in store by registering now: https://lnkd.in/gAd-bdFk

Ban, what ban? Democratising gambling and undermining democracy. Bloomberg reports: "President Joe Biden’s withdrawal from the US race, the assassination attempt on Donald Trump and intrigue about the Democratic ticket have propelled open wagers about various US election outcomes close to $1 billion on Polymarket, a 500% jump over the past few months. They’re growing even though Polymarket says it has excluded US users since 2022 as part of a settlement with federal regulators. The surge includes new bets from Americans, according to interviews with US-based users who have recently placed wagers on the platform. In practice, Polymarket’s system for blocking US users is easily circumvented by using virtual private networks, and social media is rife with instructions on how to do it." 🙄 And you wonder why regulators don't trust crypto. "Polymarket hasn’t been accused of violating its agreement with the Commodity Futures Trading Commission, but its soaring popularity is setting up a clash between the anything-goes crypto world and US regulators. The agency is pushing for a clampdown on election-related betting and seeking more authority to police digital assets, while crypto companies are currying favor with politicians and arguing that existing rules don’t apply to them." 🤷🏻 Regulators failed once when the crypto lobby was smaller... spectacularly. Now the lobby is bigger than before. "Election betting has driven the biggest surge in activity on Polymarket, and former President Trump has even shared the site’s odds on the likelihood of his return to the White House. According to the most popular gamble on the prediction platform, Trump has about a 55% chance of becoming president again. A Bloomberg News/Morning Consult poll, published July 30, showed Kamala Harris has wiped out Trump’s lead across seven battleground states." Polymarket would claim its crystal ball is more accurate because its respondents have skin in the game. But could it not be argued that the difference in the odds reflects wishful thinking? 🤔 After all: "Deep-pocketed crypto champions hope a potential second term for Trump would reel in the regulatory onslaught." Whatever the case, it's early days yet and much can change between now and November so... 🤷🏻 But it would be interesting to see if the Polymarket odds consistently favour Trump over the no stakes polling. "Contracts currently on Polymarket let traders bet in categories such as politics, sports and pop culture on events such as “Will Taylor Swift endorse Kamala Harris?” or which country will win the most medals at the Olympics. To the CFTC, those contracts are derivatives that can come under the agency’s jurisdiction." 🤔 You mean this isn't straight up gambling? I suppose they're derivatives in the same way that most of crypto are commodities because you fill your car with ether, you eat bitcoin and you drink solana? 🤷🏻

Today, the United States Senate passed H.J. Res. 109, which disapproved Staff Accounting Bulletin (SAB) 121. SAB 121 imposed harmful requirements on #banking institutions seeking to #custody #digitalassets The resolution passed the Senate 60-38. #crypto #blockchain #web3 The big question now is whether President Biden will veto the legislation, as he has indicated he would do in the Statement of Administration Policy they released on May 8th. That Statement said: "The Administration strongly opposes passage of H.J. Res. 109, which would disrupt the Securities and Exchange Commission’s (SEC) work to protect investors in crypto-asset markets and to safeguard the broader financial system.  H.J. Res. 109 would invalidate SEC Staff Accounting Bulletin 121 (SAB 121), which reflects considered SEC staff views regarding the accounting obligations of certain firms that safeguard crypto-assets. Moreover, as explained in staff’s accompanying release, SAB 121 was issued in response to demonstrated technological, legal, and regulatory risks that have caused substantial losses to consumers. By virtue of invoking the Congressional Review Act, it could also inappropriately constrain the SEC’s ability to ensure appropriate guardrails and address future issues related to crypto-assets including financial stability. Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce substantial financial instability and market uncertainty.  If the President were presented with H.J. Res. 109, he would veto it." https://lnkd.in/en_ZTSKk

Ahead of the U.S. #election tomorrow, the firm has published a guide on possible election outcome ramifications for the #financialservices industry. Authored by lawyers in our Antitrust, Banking, Data Strategy and Security, M&A and White Collar Groups, the guide touches on questions from each of those angles. See the key takeaways and full guide below. (1) Although neither candidate has focused on financial services, Trump almost certainly would have a more significant impact on the status quo than Harris, although both appear more favorable to crypto than the Biden Administration. (2) Regardless, the new Administration will be able to replace many key personnel. In the regulatory sphere it is often the case that “personnel is policy”. (3) The new Administration could issue Executive Orders on day one, and, if Trump is elected, he may revoke prior Biden Executive Orders. (4) The new Administration will be shaped by less agency deference by the judiciary in light of Loper Bright, including new uncertainty if prior rulemakings are invalidated by the courts. Gregory Lyons, Andrew Ceresney, Satish Kini, Helen Cantwell, Charu Chandrasekhar, Courtney Dankworth, Erez Liebermann, Gordon Moodie, Jeff Robins, Kristin Snyder, Caroline Swett, Ted Hassi, Patrick Fuller, Chen Xu, Benjamin Collins-Wood, Alexandra Mogul, Taylor Richards, Brynn D'Avanzo

"Election markets are coming," reads a message from prediction market Kalshi after mixed results in court, Axios' Brady Dale and Felix Salmon report. 🗳️ Why it matters: Victory for Kalshi could pave the way for the general public to bet on election outcomes — and, if you believe the U.S. government, jeopardize election integrity. Catch up quick: Kalshi is challenging a Commodity Futures Trading Commission (CFTC) move blocking it from accepting bets on which party will control Congress next year. 🛑 The judge ruled Friday in Kalshi's favor — but granted the regulators an emergency stay yesterday. Election betting "could potentially be used in ways that would have an adverse effect on election integrity," the CFTC said in a recent motion. 💰What's next: If Kalshi wins, election betting could go mainstream fast. Sports betting is now legal in 38 states.

It’s Election Day in America. I voted for Kamala Harris to protect American democracy, expand women’s rights, and continue our post-COVID economic recovery. A Harris presidency will be great for crypto, as the last 4 years have been great for crypto. During that time, despite poor SEC leadership, we saw approval of BTC and ETH ETFs in the US, and BTC reached 3 new ATHs. Harris also supports the pro-crypto values of individual freedom and internationalism that Vitalik discussed on his blog in July. And, after 250 years and 46 presidents, it is long past time for America to elect a woman as president. Trump is not a viable choice for president. His presidency was a disaster. He botched the US COVID response, causing mass death and an economic crisis. He instigated the Jan 6 riot. And he attempted to overturn the 2020 election. His campaign this year has included claims that illegal immigrants are “animals” who are “poisoning the blood of our country,” that his political opponents are “the enemy from within,” that journalists should be shot, and that if he loses, he will blame “Jewish people.” His rhetoric has been not only frightening and disgusting, but un-American. Another Trump presidency would be a disaster for crypto because his proposed tariffs and mass deportations would trigger an economic depression. And Trump, as a xenophobic, authoritarian white supremacist, does not share Vitalik’s pro-crypto values of individual freedom and internationalism. So, I voted. Good luck, all.