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Crypto & government: from anarchy to amity in the USA

Crypto bros are known to self-identify as libertarians, believing in the primacy of individual autonomy and the minimal interference of government or any other centralised authority in our lives. Quartz drew a nice Venn diagram of the overlap between the two groups in an article back in May:

But while six months ago it was all “RIP fiat” and “we don't need government”, it appears that some in the crypto community are changing their tune. (We're not sure if this has anything to do with the more-than-halving of the estimated value of the crypto market since the start of the year.)

On Friday, Andreesen Horowitz-backed crypto giant Coinbase said in a public filing that it had set up a Political Action Committee, or a PAC, to spend on upcoming elections. (PACs are organisations in the US that collect donations of at least $1,000 specifically to influence the outcome of elections or to campaign for other initiatives or legislation.)

That came in the same week that the New York Post reported that the Winkelevoss twins donated $100,000 to the re-election campaign of New York Governor Andrew Cuomo -- less than a month before the twins' Gemini crypto exchange was given approval to operate in the state. Once the approval had been secured, the Winklevii chucked in another $30,000 for good measure, according to the Post.

It's not yet clear exactly who the lucky recipient(s) of Coinbase's PAC funds will be, and the company wasn't immediately available for comment on that. It's likely that this is largely an effort to show its investors that it's working on getting greater (Wall) Street cred. (Getting “whitelisted” by Facebook probably helps, too.) But it's clear that Coinbase, Gemini, and others in cryptoland have become very keen to get a stamp of approval from government.

Tim Swanson, founder of tech consultancy Post Oak Labs, told us:

The irony of setting up a PAC, or lobbying organisation, or even donating directly to specific candidates, is that the underlying architectural assumption with cryptocurrencies - such as bitcoin - is that they are anarchic by design. That is to say, these networks were originally architected to bypass intermediaries and traditional gatekeepers.

As the Mueller indictment of the GRU last week explained, the officers used bitcoin to avoid direct relationships with traditional financial institutions. If even in a different universe Satoshi had wanted to create a network that directly interfaced with the traditional legal system, bitcoin would likely not look like it does today (certainly no need for proof-of-work). And many of its earliest promoters -- anarchists and libertarians of various stripes -- would probably not have been interested in using or promoting it.

To use an analogy, an anarchist PAC is like a libertarian police department: it's a contradiction in terms.

But while the heavyweights court the powers that be directly, the humbler crypto bros are begging to be accepted by the SEC by writing in to try to get the latest bitcoin ETF approved. (The SEC has already rejected about ten.)

The SEC published some of the letters on its site and they make for a great -- if often perplexing -- read. We didn't have to go far to find some absolute, utter gems. (If there was ever any doubt that “crypto bros” is an apposite term, take a quick glance at the names of the letter-submitters.)

Take this one, to which we have added emphasis but not sic notations for space and readability purposes:

I strongly support the proposal of Bitcoin ETF.

In December because of SEC approval of Futures, Bitcoin went up from $3K to $20K. we again need SEC help to make money for small retail investors who lost lot of money in last 7 months. ETF has potential to take the price of Bitcoin from $6K to $30K in few days and that can start the new crypto cycle and help US economy during these trade wars.

ETF will be the great news for US economy. crypto is the future and US can lead the world by allowing ETF. Crypto Investors around the world is eagerly waiting for SEC to approve it and support this revolution.

Vive la (government-backed) révolution! And if you thought that was deep, it got way more existential in some of the other comment letters:

Adapt or die. Approve Bitcoin ETF and take the leading step for advancing the human race through the revolutionary technology we have been gifted

The winning comment letter is probably from the guy who managed to get this published on the website of the Securities and Exchange Commission of the United States of America (emphasis ours, again):

We support the integration of the Bitcoin ETF to build a space society capable of propelling mankind forward to the atomic age. We believe the Pied Pipers of the SEC will make the dreams of the cult of crypto a reality. We stand ready to invest all of our fiat, valuable or not into this ETF. We promise to be completely responsible. Pretty please make this legal, with a cherry on top.

I. C. Weiner.

Related links:
Crypto's most devout believers are suffering a crisis of faith - FT Alphaville
Winklevoss twins donate $130k to Cuomo after getting state approval - New York Post
Frenzy to get bitcoin ETF listed is clogging up the SEC's email - Bloomberg

  1. 'I'm sorry Dave, I'm afraid I cannot sanction this Series B round'
  2. RBC, through the FANG barrier
  3. Self-help to buy
  4. CFA: Chartered crypto analysts -- updated
  5. The Netflix dilemma -- updated
  6. Fujitsu's new blockchain offering: really cheap or really expensive?
  7. Nothing But the Shirt on Your Back
  8. Universities of Britain: cosying up to crypto is a bad look
  9. How to make a living in the cult of meritocracy
  10. Spotify: Drake-oil salesmen
  11. Oh, the digital humanity
  12. Building a blockchain Britain in Bloxwich, because ...?
  13. Sports are not markets, predictions ain't investment
  14. Spot the difference, Steinhoff edition
  15. Larry Robbins, a cautionary tale
  16. The node to serfdom
  17. Carney is down with the crypto kids
  18. Samsonite: inventory, excess baggage, and unresolved questions
  19. It might be a long wait for “the equivalent alternative to ICOs”
  20. Don't blame it on the sunshine
  21. In corporate America, brands develop you
  22. One in ten dollars of US housing were anonymous
  23. Should AT&T worry more about its debt?
  24. Who cares if Elon is incinerating capital?
  25. Let’s not try make 'crypto chicks' a thing
  26. Tokens all the way down
  27. Eight-dimensional chess with Elon Musk
  28. A lopsided trade is a good trade, Italian inflation edition
  29. How to buy Italian fire insurance
  30. Atlas bugged
  31. Inflating inflation
  32. Crypto's most devout believers are suffering a crisis of faith
  33. Plus500: past performance is no guide to the future
  34. Noble rot in a shrinking Harbour
  35. In defence of ticket touts
  36. Please don't tell individual investors to buy leveraged loans
  37. RIB Software: the unicorn rainy-day fund
  38. Retail is not dead
  39. Did Soros really give Tesla a “vote of confidence”?
  40. At a crypto conference in New York, it feels like 2017 all over again
  41. Egregious expectations - Intelsat edition
  42. Bitcoin cash is expanding into the void
  43. Stop getting The Flintstones wrong
  44. Bond investors do not care if Argentina is solvent in 100 years
  45. Ubiquiti Networks: of cash and borrowed time
  46. “We're very disappointed in you, Spotify”
  47. 'Sex redistribution' and the means of reproduction
  48. Tesla probably needs to raise capital this year
  49. No entitlement crisis in America
  50. Free cash flow to whom?
  51. Hey crypto bros! Journalism ≠ advertising
  52. Human capital and the jobs guarantee
  53. This is a tech bubble, when's the crash?
  54. The magic of adjustments: ebitla-dee-da
  55. FUD, inglorious FUD
  56. A complex analysis reaches same conclusion as simple one: hedge funds suck
  57. The jobs guarantee and human-capital “nationalisation”
  58. These hedge fund numbers can't be right
  59. The Vomiting Camel has escaped from Bitcoin zoo
  60. Lies, damn lies, and charticles
  61. The world doesn't need more Elon Musks
  62. No, Facebook should not become a nonprofit
  63. Sell all crypto and abandon all blockchain
  64. Immutable ledgers meet European data protection
  65. Amazon is not a bubble
  66. Japan's economic miracle
  67. Have you ever meta crypto joke you didn't like?
  68. Delaware should change its rules to let the light in
  69. Who needs the labels anyway?
  70. Baby Boomers want your family to finance a larger share of their retirement
  71. No, America would not benefit from authoritarian central planning
  72. No one needs to buy Tesla
  73. How to win a debate in the cult of meritocracy
  74. Steinhoff International and the case of Pepkor Global Sourcing
  75. Sorry Jack, Bitcoin will not become the global currency
  76. The “academic’s cryptocurrency” is an elegant waste of time
  77. Cigarettes are the vice America needs
  78. Well that’s one reason to buy yen…
  79. Musicians, don't just blame the labels for your lack of dough
  80. Giving stock away to staff doesn't absolve share buybacks
  81. A penny for Macpherson’s thoughts on the nominal anchor
  82. Monopoly and its discontents
  83. A State of Mind
  84. America is not the least protectionist country in the world
  85. This is nuts, when does Netflix crash?
  86. No Bloomberg, the world's richest people did not lose $114bn...
  87. Someone is wrong on the internet, government employee pensions and passive investing edition
  88. Someone is wrong on the internet, possibly fragile
  89. Someone is wrong on the internet, consumer financial regulation edition
  90. Someone is wrong on the internet: tontine tokens [Update]
  91. Someone is wrong on the internet, road economics edition
  92. Someone is wrong on the internet, wages and the stock market edition
Copyright The Financial Times Limited 2018. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

Let's block ads! (Why?)

Crypto bros are known to self-identify as libertarians, believing in the primacy of individual autonomy and the minimal interference of government or any other centralised authority in our lives. Quartz drew a nice Venn diagram of the overlap between the two groups in an article back in May:

But while six months ago it was all “RIP fiat” and “we don't need government”, it appears that some in the crypto community are changing their tune. (We're not sure if this has anything to do with the more-than-halving of the estimated value of the crypto market since the start of the year.)

On Friday, Andreesen Horowitz-backed crypto giant Coinbase said in a public filing that it had set up a Political Action Committee, or a PAC, to spend on upcoming elections. (PACs are organisations in the US that collect donations of at least $1,000 specifically to influence the outcome of elections or to campaign for other initiatives or legislation.)

That came in the same week that the New York Post reported that the Winkelevoss twins donated $100,000 to the re-election campaign of New York Governor Andrew Cuomo -- less than a month before the twins' Gemini crypto exchange was given approval to operate in the state. Once the approval had been secured, the Winklevii chucked in another $30,000 for good measure, according to the Post.

It's not yet clear exactly who the lucky recipient(s) of Coinbase's PAC funds will be, and the company wasn't immediately available for comment on that. It's likely that this is largely an effort to show its investors that it's working on getting greater (Wall) Street cred. (Getting “whitelisted” by Facebook probably helps, too.) But it's clear that Coinbase, Gemini, and others in cryptoland have become very keen to get a stamp of approval from government.

Tim Swanson, founder of tech consultancy Post Oak Labs, told us:

The irony of setting up a PAC, or lobbying organisation, or even donating directly to specific candidates, is that the underlying architectural assumption with cryptocurrencies - such as bitcoin - is that they are anarchic by design. That is to say, these networks were originally architected to bypass intermediaries and traditional gatekeepers.

As the Mueller indictment of the GRU last week explained, the officers used bitcoin to avoid direct relationships with traditional financial institutions. If even in a different universe Satoshi had wanted to create a network that directly interfaced with the traditional legal system, bitcoin would likely not look like it does today (certainly no need for proof-of-work). And many of its earliest promoters -- anarchists and libertarians of various stripes -- would probably not have been interested in using or promoting it.

To use an analogy, an anarchist PAC is like a libertarian police department: it's a contradiction in terms.

But while the heavyweights court the powers that be directly, the humbler crypto bros are begging to be accepted by the SEC by writing in to try to get the latest bitcoin ETF approved. (The SEC has already rejected about ten.)

The SEC published some of the letters on its site and they make for a great -- if often perplexing -- read. We didn't have to go far to find some absolute, utter gems. (If there was ever any doubt that “crypto bros” is an apposite term, take a quick glance at the names of the letter-submitters.)

Take this one, to which we have added emphasis but not sic notations for space and readability purposes:

I strongly support the proposal of Bitcoin ETF.

In December because of SEC approval of Futures, Bitcoin went up from $3K to $20K. we again need SEC help to make money for small retail investors who lost lot of money in last 7 months. ETF has potential to take the price of Bitcoin from $6K to $30K in few days and that can start the new crypto cycle and help US economy during these trade wars.

ETF will be the great news for US economy. crypto is the future and US can lead the world by allowing ETF. Crypto Investors around the world is eagerly waiting for SEC to approve it and support this revolution.

Vive la (government-backed) révolution! And if you thought that was deep, it got way more existential in some of the other comment letters:

Adapt or die. Approve Bitcoin ETF and take the leading step for advancing the human race through the revolutionary technology we have been gifted

The winning comment letter is probably from the guy who managed to get this published on the website of the Securities and Exchange Commission of the United States of America (emphasis ours, again):

We support the integration of the Bitcoin ETF to build a space society capable of propelling mankind forward to the atomic age. We believe the Pied Pipers of the SEC will make the dreams of the cult of crypto a reality. We stand ready to invest all of our fiat, valuable or not into this ETF. We promise to be completely responsible. Pretty please make this legal, with a cherry on top.

I. C. Weiner.

Related links:
Crypto's most devout believers are suffering a crisis of faith - FT Alphaville
Winklevoss twins donate $130k to Cuomo after getting state approval - New York Post
Frenzy to get bitcoin ETF listed is clogging up the SEC's email - Bloomberg

  1. 'I'm sorry Dave, I'm afraid I cannot sanction this Series B round'
  2. RBC, through the FANG barrier
  3. Self-help to buy
  4. CFA: Chartered crypto analysts -- updated
  5. The Netflix dilemma -- updated
  6. Fujitsu's new blockchain offering: really cheap or really expensive?
  7. Nothing But the Shirt on Your Back
  8. Universities of Britain: cosying up to crypto is a bad look
  9. How to make a living in the cult of meritocracy
  10. Spotify: Drake-oil salesmen
  11. Oh, the digital humanity
  12. Building a blockchain Britain in Bloxwich, because ...?
  13. Sports are not markets, predictions ain't investment
  14. Spot the difference, Steinhoff edition
  15. Larry Robbins, a cautionary tale
  16. The node to serfdom
  17. Carney is down with the crypto kids
  18. Samsonite: inventory, excess baggage, and unresolved questions
  19. It might be a long wait for “the equivalent alternative to ICOs”
  20. Don't blame it on the sunshine
  21. In corporate America, brands develop you
  22. One in ten dollars of US housing were anonymous
  23. Should AT&T worry more about its debt?
  24. Who cares if Elon is incinerating capital?
  25. Let’s not try make 'crypto chicks' a thing
  26. Tokens all the way down
  27. Eight-dimensional chess with Elon Musk
  28. A lopsided trade is a good trade, Italian inflation edition
  29. How to buy Italian fire insurance
  30. Atlas bugged
  31. Inflating inflation
  32. Crypto's most devout believers are suffering a crisis of faith
  33. Plus500: past performance is no guide to the future
  34. Noble rot in a shrinking Harbour
  35. In defence of ticket touts
  36. Please don't tell individual investors to buy leveraged loans
  37. RIB Software: the unicorn rainy-day fund
  38. Retail is not dead
  39. Did Soros really give Tesla a “vote of confidence”?
  40. At a crypto conference in New York, it feels like 2017 all over again
  41. Egregious expectations - Intelsat edition
  42. Bitcoin cash is expanding into the void
  43. Stop getting The Flintstones wrong
  44. Bond investors do not care if Argentina is solvent in 100 years
  45. Ubiquiti Networks: of cash and borrowed time
  46. “We're very disappointed in you, Spotify”
  47. 'Sex redistribution' and the means of reproduction
  48. Tesla probably needs to raise capital this year
  49. No entitlement crisis in America
  50. Free cash flow to whom?
  51. Hey crypto bros! Journalism ≠ advertising
  52. Human capital and the jobs guarantee
  53. This is a tech bubble, when's the crash?
  54. The magic of adjustments: ebitla-dee-da
  55. FUD, inglorious FUD
  56. A complex analysis reaches same conclusion as simple one: hedge funds suck
  57. The jobs guarantee and human-capital “nationalisation”
  58. These hedge fund numbers can't be right
  59. The Vomiting Camel has escaped from Bitcoin zoo
  60. Lies, damn lies, and charticles
  61. The world doesn't need more Elon Musks
  62. No, Facebook should not become a nonprofit
  63. Sell all crypto and abandon all blockchain
  64. Immutable ledgers meet European data protection
  65. Amazon is not a bubble
  66. Japan's economic miracle
  67. Have you ever meta crypto joke you didn't like?
  68. Delaware should change its rules to let the light in
  69. Who needs the labels anyway?
  70. Baby Boomers want your family to finance a larger share of their retirement
  71. No, America would not benefit from authoritarian central planning
  72. No one needs to buy Tesla
  73. How to win a debate in the cult of meritocracy
  74. Steinhoff International and the case of Pepkor Global Sourcing
  75. Sorry Jack, Bitcoin will not become the global currency
  76. The “academic’s cryptocurrency” is an elegant waste of time
  77. Cigarettes are the vice America needs
  78. Well that’s one reason to buy yen…
  79. Musicians, don't just blame the labels for your lack of dough
  80. Giving stock away to staff doesn't absolve share buybacks
  81. A penny for Macpherson’s thoughts on the nominal anchor
  82. Monopoly and its discontents
  83. A State of Mind
  84. America is not the least protectionist country in the world
  85. This is nuts, when does Netflix crash?
  86. No Bloomberg, the world's richest people did not lose $114bn...
  87. Someone is wrong on the internet, government employee pensions and passive investing edition
  88. Someone is wrong on the internet, possibly fragile
  89. Someone is wrong on the internet, consumer financial regulation edition
  90. Someone is wrong on the internet: tontine tokens [Update]
  91. Someone is wrong on the internet, road economics edition
  92. Someone is wrong on the internet, wages and the stock market edition
Copyright The Financial Times Limited 2018. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

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