Vitalik’s election warning opens rift in crypto

Instead of fighting between Ethereum and Solana, crypto participants have a new battleground — US politics.

And a simple question from Vitalik Buterin kicked off even more infighting.

“If a politician is pro-crypto, the key question to ask is: are they in it for the right reasons?” the Ethereum co-founder wrote in a blog post Wednesday.

Though he never named any specific candidates, the post sparked a serious debate.

“Overall, much of this seems too clever by half,” said Jake Chervinsky, chief legal officer at Variant Fund. “Good crypto policy requires electing pro-crypto candidates, period.”

Why Vitalik is Wrong

Vitalik recently published a blog post entitled “Against choosing your political allegiances based on who is ‘pro-crypto.’” The core of his argument is that supporting politicians solely based on their positions on cryptocurrencies (i.e., decentralized… https://t.co/BGz0jYi4cO

— yuga.eth 🛡 (@yugacohler) July 17, 2024

“Billionaire lecturing the rest of us not to vote in our own financial interest,” tweeted a pseudonymous user named KBB. “I’ll vote pro-crypto candidates all day.”

Others applauded Buterin, a 30-year-old Canadian and Russian programmer, for wading into the debate.

“Salient point from Vitalik wherein he explains the affinity fraud that could occur with regard to superficially ‘crypto-friendly’ politicos,” said Tim Swanson, head of market intel at Clearmatics, a crypto infrastructure firm.

Peter Van Valkenburgh, director of research at Coin Center, lauded Buterin’s warning to maintain crypto’s cypherpunk ethos. “Politicians will come and go. Privacy, speech, and the rule of law must be preserved,” he wrote on X.

Buterin urged voters to examine whether a candidate’s so-called crypto principles align with those that underpin the cypherpunk movement, which has more to do with cryptography and privacy rights than with skyrocketing memecoins.

That distinction — between tech-libertarian values and getting rich quickly — has become even more evident this year.

“Look at how easily projects have shied away from privacy techniques or even stripped them away because of the fear of regulation and how it would affect their token price,” Reuben Yap, project steward of privacy project Firo.

Major crypto exchanges like Binance and OKX have either delisted or upped monitoring of privacy tokens such as Monero as regulators have increased their enforcement of the industry.

Political hot topic

Buterin’s comments come just four months ahead of the hotly contested presidential election in the United States — one that bears all the hallmarks of becoming the first crypto election.

The crypto industry has lobbied politicos for years to make them write light-touch laws that don’t — as they often put it — stifle innovation, pushing the narrative that it could even swing elections.

Now, they seem to be getting their wish.

Security.org estimates that 40% of Americans own crypto in 2024. The Federal Reserve puts that figure at 7%

And with so many voting citizens holding crypto, some crypto pundits have whittled down the complicated matter of voting for a new US president to one question: Who will pump my bags?

Political dynamics across the world unfortunately have become more polarizing - far extremes and that places a hard choice on voters

It’s not choosing who is “pro-crypto” as much as not voting for those that are very much against its existence

Because if you’re here you… https://t.co/PijVZJOwBa

— Santiago R Santos | #9159 (@santiagoroel) July 17, 2024

President Joe Biden has adopted an anti-crypto stance in the past, and he has vetoed pro-crypto bills and proposed to close tax loopholes for crypto traders.

More recently, however, he seems to have warmed up to industry, if just ever so slightly.

Former President Donald Trump has recently been painted as pro-crypto, despite having called Bitcoin a scam in 2021.

And while many champion Trump’s position, it’s this waffling that Buterin and Yap urge voters to consider.

“I agree with Vitalik in that many politicians are just paying lip service to supporting crypto just as a way to gain traction without actually truly believing in it,” said Yap.

Others had harsher words.

“Politicians are muppets of the most promising narratives,” Pascal Caversaccio, a crypto security researcher, told DL News.

“They don’t do it because they truly care but because they want to be voted for,” he said.

Liam Kelly is a DeFi correspondent at DL News. Reach out at liam@dlnews.com.