Crypto Businesses May Flee the US Under a Harris Presidency

The 2024 US presidential election is shaping the future of the crypto industry, and analysts’ opinions differ on what this future looks like. Alex Svanevik, Nansen’s CEO, believes a Trump win would create a favorable regulatory environment for crypto in the U.S., while Kamala Harris might maintain a more challenging stance. Meanwhile, Anthony Scaramucci recently praised Harris’s approach to bipartisan crypto regulation. On the other hand, Trump’s own crypto-related initiative, World Liberty Financial, has faced a lot of criticism, mainly about its timing and execution. Additionally, California has passed laws to ban AI-powered election deepfakes.

Crypto Shifts After 2024 US Election

In an interview at Token2049, Alex Svanevik, the CEO of blockchain analytics platform Nansen, shared some of his thoughts on the potential impact of the 2024 United States presidential election on the crypto industry. He mainly spoke about the implications of a victory by either Donald Trump or Kamala Harris and how it could shape the future of cryptocurrencies both in the US and globally.

Svanevik believes that a Trump victory will be highly favorable for the US crypto industry, especially due to Trump’s pro-crypto stance. He pointed out that Trump previously engaged with cryptocurrency projects and he has openly voiced his support for the sector. This could suggest that his presidency could lead to a much more welcoming regulatory environment for crypto businesses in the US.

On the other hand, Svanevik shared that if Kamala Harris were to win the presidency, it could signal a more challenging environment for crypto in the US. He suggested that her policies might continue the current administration’s approach, which has been seen as less favorable towards the development and innovation of cryptocurrencies. 

However, Svanevik acknowledged that this outcome might actually have some positive implications for the global crypto market. If Harris wins, he predicted that many US-based crypto firms might relocate abroad, leading to a bullish outlook for the industry outside of the US.

While a Trump victory could be positive for the US crypto market, Harris’s presidency might also open new opportunities for crypto businesses internationally.

Anthony Scaramucci Praises Harris’s Crypto Approach

Not everyone necessarily agrees with Svanevik. Hedge fund manager Anthony Scaramucci recently praised Kamala Harris’s approach to crypto policy, and stated that she seems to be on the right track. In a CNBC interview, Scaramucci talked about the need for bipartisan cryptocurrency regulation in the US and shared his optimism about Harris’s evolving stance on the issue. 

He even revealed that Harris’s campaign invited him to join her team after her recent debate with Donald Trump, to focus on discussions around crypto. Scaramucci mentioned that there have been multiple meetings between Biden administration officials and Harris’s team, which he believes indicated that they are moving towards a more centrist approach. 

However, he did point out that Harris has not yet had the opportunity to firmly establish her position on crypto as she adjusts to her political role. He anticipates that she will outline her economic policies very soon.

After the debate, Harris gained a slight lead over Trump on Polymarket after a 2 percentage point advantage.  The odds currently stand at 50% for Harris and 48% for Trump. 

US presidential election winner odds (Source: Polymarket)

Scaramucci previously urged the crypto industry to support Joe Biden over Donald Trump, and reiterated his concerns about the legal uncertainty that might come with a Trump presidency during the interview. He stated that he would rather prefer dealing with regulatory challenges under people like Elizabeth Warren and Gary Gensler than facing the broader instability he associates with Trump’s leadership.

Trump Faces Criticism

While Harris is starting to gain the trust of some in the crypto community, things might get worse for Trump. Less than 24 hours after Donald Trump announced plans to launch a token through his World Liberty Financial project, the move faced criticism from many crypto users on social media. 

In August, Trump and his sons hinted at a decentralized finance project without providing much detail, which created a lot of anticipation in the crypto community. On Sept. 12, Trump announced an X Spaces discussion about World Liberty Financial, scheduled for Sept 18.

In the lead-up to the event, some pro-crypto Trump supporters started sharing their doubts about the initiative. Nic Carter, a partner at Castle Island Ventures, called the project a “huge mistake,” and stated that Trump’s campaign was naively trying to capitalize on his pro-crypto stance. 

The X Spaces event also revealed very little about the project, aside from the announcement of the WLFI token, which the Trump team did not consider to be under SEC regulation. Some crypto users criticized the move, and some even stated that Trump’s association with the project may have lost him their vote.

Among the critics was Mitchell Askew, who shared his own frustration on X. He accused Trump of launching a poorly timed token with 70% of the supply pre-mined, just weeks before the election. Others on social media also voiced concerns over the project’s timing, especially with the election so close. The project’s launch also came after a debate victory for Democratic candidate Kamala Harris, which only added to the perception that Trump’s timing was risky.

While some single-issue crypto voters remained silent on the matter, legal expert Tonya Evans pointed out that Trump’s vague discussion of the project’s logistics during the X Spaces event disappointed many people. Evans suggested that non-crypto-focused voters will likely consider other factors in the election and downplayed the impact of the token launch on Trump’s support.

While Harris has not made cryptocurrency a major part of her platform, her campaign did express support for policies that could boost the industry’s growth. A political action committee backing Harris, Future Forward, even started accepting crypto donations.

California Bans Election Deepfakes Under New Law

In other election news, California Governor Gavin Newsom has signed a new law that is aimed at cracking down on the use of politically-themed artificial intelligence deepfakes during elections. The law is known as AB 2839. It took effect immediately and bans the distribution of deepfakes or “materially deceptive content” in connection with elections. 

This came after a recent incident where Elon Musk reposted a parody of a Kamala Harris campaign ad, which used AI-powered voice manipulation to falsely depict Harris calling herself an incompetent presidential candidate. Newsom specifically referenced Musk’s post when he vowed to take swift legislative action.

The new law expands existing restrictions on election-related deepfakes, extending the ban from 60 days before an election to 120 days, with some provisions continuing 60 days after the election.

On the same day, Newsom signed two other laws targeting political deepfakes, AB 2355 and AB 2655, which will take effect in January. AB 2355 mandates labels on AI-generated or altered political ads, while AB 2655 requires social media platforms with more than one million California users to block deceptive election content and remove it within 72 hours of a user report. These laws only apply in California.

The governor signed these bills during a fireside chat with Salesforce CEO Marc Benioff at the Dreamforce conference in San Francisco. Public Citizen’s Ilana Beller shared that the new laws differ a lot from previous legislation targeting political deepfakes.

Additionally, Newsom signed two more bills on Sept. 17, AB 1836 and AB 2602. They are designed to protect performers from the misuse of their digital likenesses.

Musk defended reposting the original Harris parody ad, and mocked Newsom by claiming parody is legal in America. The ad has attracted 25.4 million views on X, and is still available on the platform.