Why Democrats Should Oppose Crypto

(Updated: 2025-05-15)

The rise of cryptocurrency has spawned a deeply corrupting political machine in Washington that poses a grave threat to American democracy. Through an army of well-funded lobbyists, dark money PACs, and captured politicians, the crypto industry has metastasized from a fringe technology movement into a corrosive force eating away at our democratic institutions. Digital assets, hawked to a public with utopian promises of obsolete central banking, ubiquitous financial inclusion, and individual monetary supremacy, have revealed their putrid reality: gambling and grift tailor-made for our post-truth, social media-addled era. We are witnessing, with horrifying clarity how our democratic institutions are being captured by a new generation of grifters, con artists, and criminals. And one of them is our President.

Let's be brutally honest. Bitcoin, the supposed genesis of this revolution, was conjured in 2008. In tech years, that's practically prehistoric—barely younger than the iPhone, positively ancient compared to Apple Pay. For seventeen agonizing years, crypto advocates have shrieked from the rooftops that blockchain tokens will imminently displace conventional finance with widespread legal use cases. "Any day now," they crow. Yet, "any day" stubbornly refuses to arrive. At this point, nearly two decades in, there are still no—I repeat, NO—significant legal use cases for cryptocurrency. This isn't for lack of trying. El Salvador, in a fit of national delusion, made a catastrophic push to ram Bitcoin down its citizens' throats, making taxes payable in it, subsidizing digital wallets, and strong-arming businesses into accepting it. The result? A complete, unmitigated bust. The dream of El Salvador as a crypto-investment paradise has imploded, leaving it to pivot, bizarrely, into the Gulag business.

And what of the supposed "blockchain" technology that underpins all this, separate from the speculative tokens? Financial services companies have had fifteen long years to explore any alleged legal, non-token "blockchain" uses. There is nothing stopping them from a regulatory perspective, if there's no public offering of a security token. Companies like JP Morgan, Citibank, NASDAQ, The Clearing House, and DTCC have dutifully experimented with it. The verdict? If there's no speculative token attached, it's just a clunky, inefficient database. This kind of "blockchain" or "tokenization" software is demonstrably less efficient than simple existing systems, offering zero practical upside. So-called "blockchain use cases" are a phantom, a marketing gimmick, and certainly not something that requires bespoke laws or warrants a single second of Congress's time. Blockchain is a dead-end technology, it is for all intents and purposes completely useless in a regulated environment.

To the inevitable, tired refrain from crypto lobbyists to "not stifle innovation," the only sane Democratic response must be a derisive, "What innovation? Can you point to it? Is this 'innovation' in the room with us right now?" After seventeen years of broken promises and spectacular implosions, the "innovation" crypto offers is primarily in the fields of unregistered securities, industrial-scale money laundering, and new, more efficient ways to fleece the desperate and the gullible. For the Democratic base, and indeed for most of the American public who aren't blinded by a get-rich-quick fantasy, crypto isn't an innovation to be nurtured; it's a tired, corrupt joke, and it's long past we treated it as such.

On top of that, crypto exchange structures reveal a profound non-compliance with U.S. securities law and market regulation, specifically concerning the vertical integration of functions that are deliberately segregated in traditional financial markets. Crypto platforms routinely consolidate the roles of exchange, broker-dealer, proprietary market-maker, custodian, and often, the issuer of their own tokens. They frequently extend their operations to include clearing and settlement, high-leverage lending, and even venture capital investment in the very assets they facilitate for trading. This aggregation of roles is fundamentally at odds with a decades-old legislative and regulatory framework designed to mitigate systemic risk, prevent fraud, ensure fair dealing, and protect investor assets. The deliberate separation of these functions in traditional markets—such as the New York Stock Exchange not engaging in proprietary trading or custody—is a cornerstone of market integrity, specifically implemented to avoid the severe conflicts of interest that are, by design, endemic to the current crypto exchange model.

The inevitable consequence of this pervasive vertical integration is a range of acute conflicts of interest that U.S. securities laws are expressly designed to prevent. For instance, an exchange's affiliated proprietary trading desk, possessing non-public order flow information (as exemplified by the relationship between FTX and Alameda Research), has both the incentive and the capability to engage in practices such as front-running client orders or manipulating liquidity, contravening core tenets of fair market access and best execution obligations. The commingling and misuse of customer assets, where client funds are improperly accessed or utilized by affiliated entities without explicit consent—as starkly demonstrated in the FTX collapse—directly violate established custodial duties and SEC rules which mandates the segregation and safeguarding of customer funds and securities. Furthermore, the common lack of robust internal controls creates significant risks of insider trading, while the practice of exchanges listing their own tokens or accepting payments for listings without objective, transparent criteria prioritizes the exchange's financial gain over client interests and market fairness. The structure of crypto exchanges does not represent an evolution in financial markets, but rather a regression from established legal safeguards, creating an environment where conflicts of interest systematically disadvantage participants and undermine overall market integrity.

The entire edifice of crypto exchanges is built upon the exploitation of the very conflicts of interest inherent in their vertically integrated stack. Strip away their ability to simultaneously act as exchange, broker, proprietary trader, custodian, and issuer—to self-deal, front-run clients, commingle funds, and manipulate markets through opaque token listings—and what remains is an uncompetitive, inefficient shell, unable to sustain itself without these predatory advantages. Given that this industry demonstrably adds no net value to the real economy, and instead functions primarily as a speculative casino, the notion that it deserves a bespoke regulatory carveout—effectively a license to continue these abuses—is preposterous. Its very existence in its current form is predicated on these conflicts; without them, there is no economically justifiable "there" there.

The political targeting and subsequent defeat of Senator Sherrod Brown, orchestrated by the crypto industry, should serve as a stark wake-up call regarding the sector's burgeoning political force. Deploying $40 million, these industry advocates successfully unseated the Senate Banking Committee Chair, a thirty-year stalwart champion of consumer protection and financial regulation. This substantial investment supported his Republican challenger, an avowed crypto advocate, and this outcome not only contributed to a shift in Senate control but also powerfully demonstrated the crypto sector's rapidly escalating political influence. The campaign against Brown exemplified the industry's clear-cut strategy: identifying and targeting critics for removal while vigorously backing pro-crypto candidates. The campaign against Brown was a textbook example of the industry's thuggish, binary worldview: politicians are either useful idiots to be lavishly funded or obstacles to be ruthlessly eliminated. The message to every other public servant was brutally clear: cross the crypto cartel, and they will come for your seat.

Crypto is a rabidly libertarian project, fueled by the economic desolation and precarity wrought by thirty years of rising inequality, and now synthesized with the financialization of populist rage. It masquerades as a champion of individual freedom and decentralization, but in reality, it actively undermines the institutions and social contracts that are the very bedrock of personal liberties in liberal democracies. By aggressively promoting a system that prioritizes unregulated, anonymous transactions, crypto advocates deliberately foster an environment ripe for industrial-scale exploitation and catastrophic instability. This isn't just precarious; it's a monstrous deception when peddled as a path to financial liberation. The grim truth is that it concentrates wealth and power into the grasping hands of a new technocratic elite, leaving the vast majority cannon fodder for market volatility and sophisticated financial manipulation. The promise of crypto as a great equalizer is a cruel mirage, obscuring a far more insidious engine of economic disparity and social atomization.

The primary allure of cryptocurrency, its supposed democratizing potential, is a bald-faced lie. The narrative that circumventing traditional banking will democratize finance is logically incoherent. Crypto assets are a zero-sum speculative casino—meaning that for anyone to make money, someone else must lose an equal amount—not a new form of money or a store of value. There is no fundamental economic value to crypto assets outside this unregulated gambling den. Crypto doesn't grow the economy; it is a voracious siphon, draining wealth from the unsuspecting poor directly into the pockets of the predatory rich—a design feature, not a bug. Democrats should focus on industries that expand the economic pie, not on legitimizing rent-seeking, zero-sum gambling schemes.

From the perspective of Democratic values—which should champion social responsibility, economic equity, and institutional integrity—the crypto movement's unfettered, laissez-faire savagery is anathema. Regulations exist for good reasons: to ensure markets are fair, transparent, and accountable, and to protect investors from the rampant fraud and manipulation that are crypto's lifeblood. Cryptocurrency's inherent illiberality is most starkly revealed in its gleeful facilitation of an unregulated shadow market where nefarious actors thrive in open defiance of the rule of law. This anarchic cesspool, eagerly sheltered by opportunistic gulf autocracies and tax havens, is a breeding ground for money laundering, tax evasion, "pig butchering" scams, and the financing of global criminal enterprises. Crypto directly guts our sanctions regime and wages war against the foreign policy and geopolitical interests of the United States by offering a financial autobahn for our adversaries. Crypto is the tool of the autocrat, the strongman, the kleptocrat, and the criminal.

Then there are stablecoins—crypto's grimy back-alley for moving money, primarily to offshore casinos and other shadowy enterprises. We already possess robust, legal mechanisms for money transmission that don't punch gaping holes in KYC/AML compliance or conjure new, unregulated money market funds teetering on the brink of a run. If our current payment systems need an upgrade, it should come through transparent reform, not by legitimizing shady offshore money transmitters with documented ties to organized crime, hostile foreign powers, or enriching the Trump family.

The adoption and promotion of cryptocurrency inherently endorse fiscal policies that guarantee economic instability. Cryptocurrencies are, by their very nature, engineered for extreme, stomach-churning volatility. This is the polar opposite of the economic stability Democrats should be fighting for. The capricious, casino-like nature of crypto markets foments widespread financial precarity, especially for economically vulnerable populations lured by the siren song of impossible returns. Thus, the promise of financial liberation morphs insidiously into the specter of economic ruin, all cynically disguised as populist engagement.

It's no accident that crypto has become a cultural lodestar for Silicon Valley libertarians, Barstool conservatives, the MAGA mob, and QAnon conspiracy theorists. For years, FOX News and the like have been hawking gold coins, snake-oil diet pills, and financial doomerism as a perpetual grift machine. Crypto is merely the latest, shiniest iteration of these scams. Donald Trump launching his own memecoin while his sons establish shady crypto ventures trading on their father's name and office? Shocking, said no one ever. All these ideologies revel in anti-establishment, anti-state, and anti-democratic nihilism, and crypto is the perfect conduit for channeling that populist rage and those ill-gotten dollars into a speculative inferno. The crypto bubble inflates and sustains itself on a brew of conspiracy theory, financial doomerism, widespread financial illiteracy, and a seemingly endless supply of fresh marks for the social media grift economy.

From a broad perspective, the crypto movement is a machine that takes gambling on one side and outputs Republican campaign contributions and radicalized young men on the other. Its rise is intrinsically tied to an emergent strain of libertarian populism that corrosively eats away at democratic institutions. Operating outside any meaningful regulatory oversight, the crypto market champions a virulent ideology of radical individualism that pulverizes collective social norms and responsibilities. This financialization of populist rage is a clear and present danger, sowing discord and societal fragmentation. Crypto evangelists frame their crusade in explicitly adversarial terms against 'the establishment'—vilifying centralized banking and, by extension, the democratic governance structures that provide vital oversight. This narrative breeds distrust and disillusionment with the very institutions essential for a functioning society. It is a childish, puerile anti-system politics, hell-bent on destruction, incapable of building or reforming—the absolute antithesis of what the Democratic Party should stand for.

Even more disconcertingly, the demographic most susceptible to these narratives is composed of those already battered and disenfranchised by existing economic systems. Crypto-evangelists prey on these vulnerabilities, pitching crypto as a panacea. But as any serious inquiry shows, this "liberation" is a cruel hoax: crypto is predatory inclusion, cloaking itself in the language of empowerment to more efficiently bleed a vulnerable populace dry. These individuals are ensnared in speculative mania, gambling addiction, and rampant scams, deepening their financial precarity.

Apologists will whine that opposing cryptocurrency stifles innovation and economic freedom. This is preposterous. It fails to distinguish between genuine financial innovation and vacuous speculative bubbles built on dead-end technology. True financial innovation solves real-world problems, boosts economic efficiency, and promotes inclusive growth—benchmarks cryptocurrency has spectacularly failed to meet for over a decade. Instead, the crypto industry has excelled only at creating casinos and baroque financial instruments that obscure risk and exploit regulatory loopholes.

By opposing crypto, Democrats aren't fighting progress; they are defending the integrity of our financial system and protecting the vulnerable from predatory schemes. The immense resources and talent currently being squandered on crypto could be redirected to technologies addressing actual societal challenges: climate change, healthcare, sustainable energy. A firm stance against cryptocurrency is a vote for technological advancement aligned with public interest and long-term societal well-being, not short-term speculative orgies for a parasitic few.

The insidious claim that "crypto is here to stay"—often paired with the equally lazy "you can't put the toothpaste back in the tube"—is a thought-terminating cliché designed to excuse regulatory inaction. It's akin to asserting that because malaria persists, we should abandon all efforts to treat patients or control its spread. While global eradication of a malign influence like crypto may be unrealistic, the United States has a clear duty to aggressively mitigate its harms to our citizens and financial system. Passivity or, worse, capitulation to its supposed inevitability, is not a responsible policy; it's a surrender to its predatory nature.

Let's call crypto what it is: a mechanism to exploit the precariat, a massive wealth transfer from the poor to the rich, from the financially illiterate to the operators of digital casinos. Public policy on crypto must be rooted in an unshakeable recognition of its fundamental incompatibility with stable capital markets, social justice, economic stability, and democratic governance. The environmental devastation of crypto mining, the grotesque perpetuation of wealth inequality, and the systematic undermining of governmental oversight all point to a future of socio-economic anarchy—a dystopia diametrically opposed to democratic ideals. Crypto populism, alongside the rise of authoritarians like Putin, Orbán, and Trump, must be opposed with every fiber of our being.

The Republican Party's assault on American democracy is not hypothetical—it is an existential crisis unfolding in real time. Democrats must abandon any lingering illusions that they are engaged in genteel political discourse or friendly competition. They are in a war. And to win a war, one must cut off the enemy's supply chain. That means confronting and constraining cryptocurrency, which has emerged as the primary pipeline of dark money fueling the Republican Party's authoritarian agenda.

The Democratic Party's mandate should be clear: to rigidly reject the rise of authoritarianism through crypto's encroachment upon our society and starve its capacity to fuel the political forces arrayed against us.