Bitcoin surges but big tech has reason to fear JD Vance

Much is known about JD Vance, Donald Trump’s running mate, not least his past criticism of the Republican presidential candidate, his tough working class upbringing and his time in the US Marine Corps.

What the business world is more interested in, though, is the Ohio senator’s previous career in venture capital and his views on commerce – and what they might mean in the event of Trump returning to the White House.

In particular, Mr Vance has been strongly supportive of cryptocurrency, raising hopes in the sector that a second Trump administration could be positive for the asset class.

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So, too, is Trump who, in May, became the first major presidential candidate to accept donations in crypto-assets. He has already accumulated almost $3m worth of such assets – $1.8m in Bitcoin and $900,000 in Ethereum.

Mr Trump, a former sceptic about crypto, has himself spoken in the last week about his ambitions to support the US crypto industry.

He told Bloomberg Businessweek: “It’s not going away. It’s amazing.

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“If we don’t do it, China is going to pick it up and China’s going to have it – or somebody else, but most likely China. China’s very much into it.”

No wonder, then, that crypto assets rose in value – Bitcoin by more than 8% on Monday alone – after the assassination attempt last Saturday on Trump was widely judged as boosting his chances of victory this November.

In Mr Vance, the former president has chosen a running mate who is a strong advocate of crypto, having previously reported owning holdings of Bitcoin worth between $100,000 to $250,000 on the Coinbase platform.

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Shortly after his anointment as Trump’s running mate, a video from 2022 resurfaced, showing Mr Vance criticising Gary Gensler, chair of the Securities & Exchange Commission (SEC), America’s main financial regulator.

In the video, from February that year, Mr Vance said Mr Gensler was “the worst person” to be in charge of US financial regulation.

He added: “He wants to inject politics way too much into the actual business of securities in the US.

“The approach that Gary has taken to regulating blockchain and crypto is the exact opposite of what it should be.”

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Earlier that month, Mr Vance had also tweeted approvingly of crypto as a way of combatting government over-reach, highlighting how the Canadian finance minister had frozen the bank accounts of truckers protesting against COVID lockdowns.

He tweeted: “This is why crypto is taking off. The regime will cut off your access to banking if you have the wrong politics.”

This year has also seen Mr Vance join other Republican senators in writing to Mr Gensler to highlight an enforcement action against the crypto miner Debt Box in which, it was subsequently found, SEC lawyers had used false statements to justify freezing the company’s assets.

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He has also voted to reverse accounting guidelines introduced by the SEC that require publicly traded banks to place digital assets that they hold in custody on their balance sheets. This rule change flies in the face of convention that bank custodial assets are held off-balance sheet and is expected to put up the cost of banks taking custody of crypto assets – and, in all probability, deterring them from doing so. President Biden subsequently vetoed attempts to overturn the rule change.

So, in Mr Vance, the US would be getting a strongly pro-crypto vice-president.

The Ohio senator would probably be better versed in tech than any previous US president or vice-president.

After law school, he worked for Mithril Capital, a venture capital firm co-founded and backed by Peter Thiel, the billionaire co-founder of PayPal.

Mr Thiel, one of the best-known figures in Silicon Valley, went on to back Mr Vance’s run for the US Senate in 2020. Mr Vance subsequently went to work for Revolution, a VC firm based in Washington DC, before launching his own VC firm, Narya Capital, in 2019.

The US news website Axios has reported that his backers in this included Mr Thiel and Marc Andreessen, another of Silicon Valley’s best-known venture capitalists. Axios said another backer of Narya Capital was Eric Schmidt, the former chief executive of Google. Another long-time supporter of Mr Vance is David Sacks, the former chief executive of the social networking service Yammer and an early-stage investor in successful tech businesses such as Facebook, Uber, Airbnb and Elon Musk’s SpaceX, as well as Palantir Technologies, another well-known tech business co-founded by Mr Thiel.

In other words, Mr Vance has impeccable connections in Silicon Valley, which explains why the likes of Mr Andreessen and Mr Musk have come forward since his nomination to pledge big sums to the Trump campaign.

That is not to say Mr Vance is a conventional ‘tech bro’. He has also, in the past, suggested the big tech companies have too much power and called for them to be broken up. He has co-written a paper that called for Google to be made a public utility and praised Lina Khan, the Democrat chair of the Federal Trade Commission, the main US competition regulator, for her efforts in trying to rein in the tech giants – even as some of his fellow Republicans have been criticising her for being too aggressive towards them.

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He told a conference in February this year: “I look at Lina Khan as one of the few people in the Biden administration that I think is actually doing a pretty good job.”

That suggests Mr Vance’s approach to tech is rather more nuanced than some people are assuming. His attitude in general appears to be welcoming to disruptors and start-ups and supportive of innovation and competition – but rather more hostile towards tech giants that inhibit consumer choice and, in his own words, are “so obsessed on pricing power within the market that it ignores all the other things that really matter.”

It should make for some fascinating discourse with the tech sector should he become vice-president.

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