Crypto Democrats rally behind Harris campaign in push for policy revamp

By Hannah Lang

(Reuters) - Billionaire Mark Cuban, Wall Street financier Anthony Scaramucci and congressman Adam Schiff were among a group of cryptocurrency advocates who called on Kamala Harris to reset the Democratic party's policy on digital assets ahead of the November election.

On Wednesday night, the new group Crypto4Harris convened its first virtual gathering to discuss how it can support the Vice President's electoral campaign, while also calling for Harris to end the Biden administration's crackdown on the cryptocurrency industry.

In a sign of how urgently crypto has become an election issue for Democrats, Senate Majority Leader Chuck Schumer appeared and said he wanted to pass a crypto bill this year, without elaborating.

"We cannot afford to continue to sit on the sidelines because then we risk crypto going overseas," he said.

The group also said it is planning nationwide grassroots fundraisers in September to support Harris.

"The chief goal of everything we're doing is to have a complete reset on crypto and blockchain policy," Jonathan Padilla, CEO of blockchain company Snickerdoodle Labs and one of the group's organizers told Reuters ahead of the gathering.

Crypto4Harris has begun "early engagement" with the Harris campaign and plans to draw up a list of potential crypto-friendly picks for regulators including the Securities and Exchange Commission (SEC), should Harris win, he added.

The group is not affiliated with the Harris campaign, which has yet to take a stance on cryptocurrencies and declined to comment for this story.

Crypto4Harris is part of a growing effort by Democrats and others in the crypto industry to push nonpartisanship rather than hitch their wagon to Republican nominee Donald Trump, who has courted crypto donors with promises of friendly policies. That effort also suggests some crypto companies are hedging their bets as Harris gains on Trump in some polls.

"There's a real chance to open this issue up and to reclaim it from the Republican side," said Rashan Colbert, head of policy at crypto exchange dYdX and a member of Crypto4Harris.

At the town hall, Scaramucci, founder of Skybridge Capital, urged lawmakers "to make cryptocurrency regulation positive and bipartisan." In a statement to Reuters ahead of the meeting, he said the Harris campaign was open-minded about digital assets.

Under Biden, the SEC has brought multiple crypto enforcement actions, arguing crypto tokens and their operators are subject to securities laws. The industry disputes that and wants new rules that would foster the technology.

Several Democratic lawmakers last month flagged concerns to the Democratic National Committee that the SEC's stance has alienated some voters, according to a letter seen by Reuters.

Harris campaign staff have met with prominent crypto firms including Coinbase and Ripple since she became the presumptive Democratic nominee last month, said three people familiar with the matter. While those discussions were not substantive, two of the sources said they were optimistic Harris' campaign might signal an openness to tech innovation.

At the DNC convention next week, tech groups are also hosting a panel on digital assets featuring lawmakers and other industry executives, according to two different sources. While not a part of the official program, the panel could provide a venue for Democrats to develop clearer crypto policies, one said.

Crenshaw and the DNC did not respond to requests for comment.

(Reporting by Hannah Lang in New York; additional reporting by Stephanie Kelly; editing by Michelle Price and Nick Zieminski)