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‘We’re just getting started’: Inside crypto’s plan to remake Washington
00:20:56
Just a couple years ago, the crypto industry was a pariah among politicians. Now, it’s poised to have a big year in Washington. And how it got here is no fluke. Industry leaders shelled out massive sums of money to elect crypto-friendly candidates, and the result is a Congress and incoming administration primed to carry out their policy goals. On POLITICO Tech, Coinbase president and chief operating officer Emilie Choi joins host Steven Overly to break down crypto’s political strategy and what it now wants in return.
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- [00:03]
Stephen Overle
Hey, welcome to Politico tech. Today's Tuesday, January 14th. I'm Stephen Overle. Just a couple of years ago, the crypto industry was engulfed in scandal. The value of digital currency was down and political leaders had plenty of criticism. But now crypto is poised to have a big year in Washington. And how it got here is no fluke. Industry leaders poured millions and millions of dollars into the 2024 campaign cycle, trying to stack Washington with crypto enthusiasts who would carry out their policy goals. And it worked. One of the key drivers of that political strategy is Coinbase, one of the largest cryptocurrency exchanges in the country. And the company's president and chief operating officer, Emily Choi, says its political ambitions are only going to grow. On the show today, Emily tells me the industry wants a reset after years of legal and regulatory fights under President Joe Biden. And why she thinks President elect Donald Trump and his crypto friendly advisors are going to provide just that. Here's our conversation. Emily, welcome to Politico Tech.
- [01:39]
Emily Choi
Thanks so much for having me.
- [01:40]
Stephen Overle
You know, as I was preparing for this, I was thinking that in many ways, crypto in Washington was kind of a pariah even just two years ago. Right. I mean, you had the FTX collapse, the Sam Bankman fried drama in court trial. The value of crypto had sort of tumbled. Now, you know, two years later, bitcoin is at an all time high. You have an incoming president who loves crypto so much, he's sort of in the industry, and you have a Congress that is expected to be crypto friendly. So do you feel some whiplash?
- [02:11]
Emily Choi
Oh, my goodness, yes. And it's a good way to describe it, feeling like pariah's 18 months ago. I mean, who would have thought 18 months ago that today we'd have a crypto czar in the presidential administration. So let's take a moment to appreciate how far we have all driven the industry forward in such a short time. I think the biggest thing that we have mobilized is that crypto users were just not seen as a voting block. And there are 52 million Americans who are using crypto. Americans are historic early adopters of transformative technologies. And what we helped them voice was how much we all wanted clear regulation, to embrace innovation and that their representatives, senators, et cetera. Listen, for us specifically, what we did was we had a multi pronged approach to the whole thing. We were very constructive about it. And the reason we were so constructive about it is because we felt like the industry and Coinbase were being vilified, unfairly you saw Elizabeth Warren and others trying to paint us with the same brush as FTX and others when we had done everything in our power to comply. We had gone public under the sec, the very auspices of the institution who was now suing us. And so we kind of just got our act together and said we have to mobilize. So we did lobbying, we did grassroots. We built something with a bunch of other industry players called Stand with crypto. There's 2 million plus advocates in that through their education and voices. And then we obviously made political donations. So we and other peers, including A16Z, Ripple and others, backed a super PAC called Fairshake to ensure that crypto has a seat at the table just like any other issue.
- [04:01]
Stephen Overle
I want to go through sort of that strategy and how it all played out, especially in this last election cycle. I am curious though, where we sit now. Obviously we have a new Congress, an administration is coming in that like you said, has a crypto czar. It's and seems really primed to be working with the industry. I'm curious what your big ask is in sort of the first 100 days of this new administration.
- [04:24]
Emily Choi
Yeah, it is really, really clear for us. So one is end regulation by enforcement. That is what we have been operating under with the current sec. We want to make sure that going forward there is no dumb turf war between the SEC and cftc, which has been really challenging to navigate. If we want to get really complex, we can say that others in this space, including like the Fed and the treasury, have also dipped their toes in all of this. And Maxine Waters recently talked about how it is kind of this unnavigable thing right now because everybody's trying to get their hands in crypto. We want to establish a very clear framework for consumers in the industry. The crypto legislation is something that's really important to us because we want to have clear rules of the road about operating crypto businesses in the United States. Most startups who were really eager to build crypto applications either exited the US or they just decided to do something else because there was just so much uncertainty. Most of these startups, if you ask any of the VCs, they ended up having to allocate 30, 40, 50% of their funding to legal costs just because of the way that the regulation was happening. And so we're just excited to have clear rules of the road, a market structure bill that explicitly talks about the CFTC overseeing digital commodities, being clear about what the SEC versus the CFTC owns, and being able to move forward and just spur innovation in the U.S. the U.S. has historically always been the center of tech innovation, whether it's AI, crypto, the Internet. We need more of that.
- [06:12]
Stephen Overle
Got it. So it sounds like really define who's regulating this industry and sort of laying out the base ground rules for operating in it. I'm curious, you know, with the incoming administration having folks with crypto connections like, you know, venture capitalist David Sachs, who is going to be the new AI and crypto czar? Paul Atkins has been picked as the new securities and Exchange Commission chair. I mean, have you or others at Coinbase had conversations yet with these folks, kind of outlining what that regulation should look like?
- [06:40]
Emily Choi
We have had conversations with these folks. I mean, we're thrilled for David Sacks to be in this role. He understands crypto and AI and their transformative potential beyond speculation. Paul Atkins, another great choice. These are very pragmatic, sensible leaders who understand how to think about these spaces and how to make sure that you are protecting consumers on the one hand, but also spurring innovation and making sure that we're keeping this innovation in the U.S. we have not explicitly had conversations about this is what a bill should look like. That's not our role. That's frankly their role, and that's the role of Congress. But there are themes, and the themes include things like what I was talking about with what does the CFTC oversee? What does the SEC oversee? What are the actual rules of the road in terms of determining how a digital asset is viewed by the administration, all those types of things. So that's what we're focused on.
- [07:35]
Stephen Overle
Got it. You know, you were saying earlier how Coinbase really ramped up its political involvement and engagement, particularly in this last election cycle. And your super PAC, Fair Shake, was one of the biggest spenders this last election cycle. I'm curious, was there a particular moment when you sort of realized, like, okay, the 2024 election is going to be really defining for this industry?
- [07:58]
Emily Choi
It felt existential to your earlier point a year and a half ago. It was a very bad situation. No politician wanted to take on this issue other than to vilify the industry. And so we knew that this was going to be a very crucial election, a once in a lifetime election. And really the goal of everything that we were doing based on the strategy that I was talking about, is how do we make sure that we are enabling the 52 million crypto voters to have their voice heard in DC? How do we make sure that we enable the election of as many pro crypto politicians as possible. And the thing that was really just striking, I mean we're a very data driven organization. 84% of the 355Pro crypto candidates up for election won their races and over 2x as many pro crypto candidates than anti crypto candidates. So now there's a 278 bipartisan pro crypto majority in the House. That's nearly 2/3 of the House of Reps. And then 100% of the new 12 elected senators are pro crypto. So we feel really good that we have actually made this so actionable and data driven and the trend line is so good for these folks to better understand the needs of the crypto voter and how we make crypto thrive in the United States.
- [09:27]
Stephen Overle
I don't think I've ever heard anyone break down in data sort of the sentiment in Washington and really sort of frame it out on such a specific level. It's interesting to hear you take that approach.
- [09:37]
Emily Choi
We're very data driven. You know, anecdote here is like, you know, a couple years ago we did the super bowl commercial and I think we were the only company that I've ever heard of who's actually done it in a more of a direct response way than just a branding way. And so everything about the way that we do things is a b testing and setting expectations. We have so many different products and priorities as a company that we map everything to okrs, which is objectives and key results because we want to see what are our expectations and then how do we perform against them. We were trying to make sure that from every angle we were attacking this and driving the most successful results we possibly could because it was really our first big foray into policy efforts. I would say a couple of years ago, just being totally honest, I just don't think we had our act together as an industry or a company on policy. We kind of felt like, oh, everybody's just going to figure out that crypto is a force for good, that the politicians who like to use these negative soundbites are just doing it to get a soundbite. And then we recognized that that was not going to happen naturally and organically. And so we kind of just had to mobilize and make sure this actually happened.
- [10:57]
Stephen Overle
I think the last I read, Fairshake had close to something like $80 million on hand for the 2026 election, which includes 25 million that Coinbase put into it. What's your strategy going forward? What's your strategy for the next election cycle?
- [11:12]
Emily Choi
The message that we're Sending here, to be totally clear is we're just getting started. So what we wanted to make sure was that we are investing in this over the longer term, that our work has only just begun. It's day one. And so we will not rest until 100% of the members of Congress understand and are pro crypto. It's going to be a forever thing. It's not going to be a one time thing. So that the strategy is just simply to elect as many pro crypto candidates as possible.
- [11:45]
Stephen Overle
You know, in this last election, fair shake did back both Democrats and Republicans. I think traditionally Republicans have maybe been more open to crypto. Certainly President Trump, you know, has said he wants the US to be the crypto capital of the world at this point. I mean, do you see Republicans as kind of the crypto party?
- [12:04]
Emily Choi
No, I, I think that this is, this is, this kind of breaks people's brains. I think this concept, crypto is a purely nonpartisan thing. I think it's hard for many people in D.C. to understand this when we articulate this. We really just want the absolute best free market pro crypto politicians, regardless of their party. And you know this better than anyone, in order to pass legislation, it by nature has to be a bipartisan thing. And I think that the funny thing to me is that I think you're right. I do think people historically associated this as just solely a Republican thing, but it should appeal to both sides very clearly. And if you think about somebody like Richie Torres, who got it early, who describes himself as a progressive, he was always focused on the fact that crypto helps enable banking of the underbanked and so on. So I think there's different appeal to it across the spectrum of types of politicians and voters. And we're really trying to like say that crypto's for everyone and everybody should.
- [13:07]
Stephen Overle
Understand that, you know, when it comes to big players in Washington. And I have covered the tech industry for a long time, and so I reported a lot when folks like Google and Meta and other companies were building up their Washington presence and kind of getting their toes in the water here. And I do think what some industries find is like they wind up coming up against other industries. It winds up being feeling like a battle. And I wonder for you all, looking forward, do you sort of feel that way? I mean, are you going to be up against big banks and traditional financial institutions trying to win over favor here?
- [13:39]
Emily Choi
I hope not. I don't want to be Pollyanna about it because I know that that's the reality. I think there's a couple of nuances for crypto. One is that the crypto voter and user is a unique being in the sense that, you know, you can see this. I think that a lot of people were skeptical there even existed a crypto voter. And then we obviously show that they exist en masse. They're a passionate group of people who want to be heard in D.C. who desperately want to make sure that the financial system works for everyone. And so I do think that they are a more engaged, active user than you will see in other industries. So I think that benefits us tremendously. Another thing that I think some people might not know about us and about crypto is that we don't view it as like some type of winner take all or any zero sum type of game. So we are thrilled when the banks or when the tradfi people or others get into crypto. We think that we're just at the early stages of it. It's not a finite game. It's an expansive, growing pie. And so when others who are in traditional industries want to get into it, we're like, yes, please. It validates the space even more and it helps us integrate with them. Like, there's all sorts of benefits. So we're really open to what, what I think would historically be perceived as like, competitors entering and having their voices heard too.
- [15:10]
Stephen Overle
You know. With that in mind, I guess I've got to ask because this is something that's been on my mind, frankly. You know, I mentioned earlier how Trump's family now has a crypto venture. It's called the World Liberty Financial. You know, it's one thing to have a president who obviously supports your industry. I wonder if it's different to have his family be active participants in it.
- [15:28]
Emily Choi
I mean, I think it's really cool. My hot take on this is just that I think that, you know, when, when you operate a company, you want people to use the product, you want people to use the technology. And I think it's the same thing, is that if you have people in D.C. who are actually using and building products in that same space, that's great. Like we can all work together to figure out what is working, what isn't working, how do we think about the user and how we can protect them and also enable all this great innovation within their phone, which is now their new financial system through crypto. I'm just in favor of politicians actually playing with these products and using them because I think it helps them understand how they should frame sensible, pragmatic regulation for the end user.
- [16:20]
Stephen Overle
One thing a thought I had is like, is there conflicts of interest or concerns about favoritism or whatever when you have the president or I guess his sons really kind of in this space selling their own tokens, that sort of thing?
- [16:35]
Emily Choi
I don't really think of it that way. I think about free markets and I think about users adopting the best product possible. So it's like, put out the best product you possibly can, and the best product will win over time. Like, I don't. I don't necessarily have some thought on. I don't know that that's ever worked in the history of, like, tech products that, you know, somebody had some type of favored angle and it helped benefit them in some way.
- [17:02]
Stephen Overle
Got it. Got it. I'm curious to get your thoughts on the crypto market today. You know, because bitcoin in particular has been on a tear lately. I obviously recently surpassed $100,000 in value for the first time. You talk to some analysts and they say this climb is going to continue. You talk to others who warn that, like, a crash is coming from where you sit. What's your take or your read on the crypto market right now?
- [17:26]
Emily Choi
Well, one thing is, I'm not a prognosticator. I think that's like, the first question I get from most people is like, where's bitcoin price going to go? And I have no idea. What I do know is that crypto goes through cycles historically, and the people who navigate those cycles the best, including companies such as Coinbase, have tended to do very well when they're not trying to time the market. I think that the rally since the election shows how much the political and regulatory headwinds were holding the market back. And I also think that the 100k milestone is testament to crypto's progress because there's now 400 million crypto global users, and we see some of the world's largest financial institutions adopting it. We're always going to focus on the long term. It's the only way that we've been able to survive for all these years. But crypto is also bigger than any one asset. So our whole focus as a company, as an industry right now is expanding broader utility.
- [18:22]
Stephen Overle
The market sort of responding favorably to the election, I think, is a really interesting point. And I'm curious, kind of tying this back into our conversation earlier about regulation, whether you see D.C. regulation as being kind of a key ingredient going forward in terms of building confidence or stabilizing that market. And I'm just thinking, in particular, the outgoing chair of the Commodity Futures Trading Commission, Rosten Baynham said recently, quote, we've seen this before in our history where we leave large swaths of finance outside of oversight and responsibility. And we have seen time and time again that it ends badly. So does Washington need to move quickly to regulate to prevent a bad ending?
- [19:07]
Emily Choi
If I leave you with one thing, it is that players such as Coinbase are desperately seeking clear, pragmatic legislation for crypto. We absolutely want sensible regulation that makes sense to protect consumers, but also enables innovation in the US the analogy I like is like every sport has refs and a clear rulebook and crypto needs the same. We have a multi trillion dollar financial system and crypto is used by one in seven Americans and the refs do not share the rules and only blow the whistle after the fact. That is what we have been up against for too long and it's time to change that. So we are very, very excited and optimistic that good, sensible crypto regulation will come to play in 2025 and that will pave the way for tons more innovation like you've seen with the Internet before. This is why we're going to have the crypto and Aizar and David Sachs. That is why we are so positive and optimistic about the future.
- [20:17]
Stephen Overle
Well, listen, I appreciate you being with us here on Politico Tech.
- [20:20]
Emily Choi
Thank you so much. It was such a pleasure. Stephen.
- [20:30]
Stephen Overle
That's all for today's Politico Tech. If you enjoy Politico Tech, be sure to subscribe. And for more tech news, subscribe to our newsletters, Digital Future Daily and Morning Tech. Our managing producer is Annie Reese. Our producer is Afra Abdullah. I'm Stephen Overleigh. See you back here tomorrow.