Democrats have consistently called out President Donald Trump’s involvement in cryptocurrency businesses that they allege are corrupt. At the same time, Democrats say they need to shake the impression that the party is hostile to crypto — both to win voters and funding.
Rep. Salud Carbajal, a centrist Democrat, said calling out Trump’s crypto schemes and supporting a good regulatory environment for crypto are two “separate” issues, and Democrats must treat them as such.
“Whether it’s crypto or negotiations with other countries, this administration has demonstrated a corruption level that we’ve never seen before,” Carbajal told NOTUS.
“Democrats are involved in crypto, and as we develop policy, we want to make sure that crypto is able to flourish,” he added. “There’s also interest in protecting consumers. So, it’s all about finding the balance to achieve a win-win scenario.”
Democrats are attempting to walk a tight rope on crypto, including on the GENIUS Act that would establish a regulatory framework for stablecoins, a kind of cryptocurrency tied to physical assets like the dollar.
Sen. Ruben Gallego, who has been a leading Democratic voice in the bipartisan GENIUS Act negotiations, said supporting crypto is part of the path forward for Democrats in regaining support from Black and Latino men, two constituencies they struggled with during the 2024 presidential election.
“The Black and Latino men are telling you that they care about the standard of living, the cost of living, jobs — and they care about crypto,” Gallego said.
“The way you get them back is to work on legislation that they’re going to appreciate,” he added. “That’s going to show that the Democrats understand the crypto economy, and that’s going to make it easier and safe for them to engage in that. And that’s the winning message.”
Many in the crypto world considered the Biden administration hostile to the industry. Leading regulators from the Biden era, like Lina Khan and Gary Gensler, were perceived by industry leaders as trying to strangle the cryptocurrency market.
For many Democrats at the time, industry scandals like the staggering rate of cryptocurrency scams and cyberattacks and the downfall of major crypto exchange FTX led them to the conclusion that the industry was too unstable to integrate into the broader economy.
The perception that Republicans were more open to crypto was beneficial for them: The 2024 election saw unprecedented amounts of cryptocurrency-related funds in support of crypto-friendly GOP candidates, such as Sens. Bernie Moreno and Dave McCormick, and Trump’s campaign. The second Trump administration has opened its arms to crypto by recruiting the investor David Sacks and starting several Trump-related incursions in the industry, like memecoins and a Trump-family-managed crypto exchange.
During a bitcoin conference in Las Vegas last month, Vice President JD Vance encouraged bitcoin enthusiasts to get involved in politics if they want to see a friendlier regulatory environment for cryptocurrencies in the U.S.
“You chose to speak up, and you chose to get involved, and I believe you changed the direct trajectory of our country because of it,” Vance told a crowd of bitcoin enthusiasts.
Democrats argue it’s a misconception to say the crypto world is exclusively right wing.
“It’s not a monolith,” Rep. Maxwell Frost told NOTUS. “There’s a lot of very progressive people in the crypto crowd.”
Regardless of their political affiliation, he added, “what a lot of people in the crypto world need to understand is that the corruption that Trump is engaging in via cryptocurrency is actually very damaging to the crypto conversation in the long term. It’s important that they advocate for good, common-sense policies.”
Frost said that crypto enthusiasts should support a GENIUS Act amendment put forward by Sens. Elizabeth Warren and Chris Murphy that would bar the president from profiting from stablecoins.
Other Democrats say they are not too concerned about losing the support of donors in the crypto industry. Sen. Tim Kaine told NOTUS that Republicans have moved to align themselves with crypto interests because their party’s policies have alienated many in the traditional business class, and now they need to seek support in other places.
“I think they view crypto as a new economic place where they can go to raise a bunch of money,” Kaine said. “With tariffs hurting mainstream businesses, they’re losing the traditional business class. They’re mismanaging the economy, so they got to find a new source of financial support.”
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Samuel Larreal is a NOTUS reporter and an Allbritton Journalism Institute fellow.