By Guy Page
The sudden collapse of a cryptocurrency company raises three big questions for campaign contribution recipient Becca Balint, Vermont’s Congress-person elect.
Just weeks ago, crypto currency firm FTX was riding high. Valued at $32 billion in January, FTX was one of the biggest boys on the blockchain. Like many leaders in an unregulated market, FTX was spending and lobbying hard for the federal government to impose regulations advantageous to them and perilous to the less-established and influential.
Last week, FTX collapsed. Over-leveraged with debt, big investors (including some major crypto competitors unhappy with the self-serving push for regulation) pulled out. Which prompted smaller investors to do likewise. Which forced founder Sam Bankman-Fried to file for Chapter 11 bankruptcy/reorganization.
Embarrassing but unimportant was the loss of its professional sports naming rights. The Miami Heat will find another corporate sponsor for its basketball arena. Major League Baseball announced the FTX logo will be removed from umpires’ uniform sleeves. Of greater importance is the loyalty of elected Democrats. Many elected to national office with money from FTX are now asking how much loyalty they still owe megadonors Bankman-Fried and senior executives.
For example, Vermont Congress-person elect Becca Balint.
In July, Chief Engineer Nishad Singh gave $1.1 million to help push Sen. Becca Balint past Molly Gray in the August 9 Democratic primary for Congress. Along with the dropout and endorsement of onetime challenger Sen. Kesha Ram and the endorsement of Sen. Bernie Sanders, the flurry of mailings and advertising made possible by Singh pushed Balint past Lt. Gov. Molly Gray.
Now, the cratering of FTX raises three big questions for Becca Balint. The first question matters most to Balint and Vermont Democrats. But it is not hyperbole to say the second and third questions touch on issues of global, transformative import.
Question #1: In two years, will other big donors step up to support Balint’s re-election? Conventional wisdom suggests she need not worry. As an incumbent in deep blue Vermont, she probably won’t face a party-backed primary opponent. If the Republicans find a worthy challenger capable of raising the volunteer and financial support needed to push her hard in the 2024 general election, he or she hasn’t appeared yet.
That’s the easy question. Answers to the next two are murkier and far, far more important.
Question #2: with FTX crippled, will Balint still support the push by the Biden administration and Sen. Elizabeth Warren for cryptocurrency regulation?
As VDC reported in August, “President Biden has teed up digital ‘crypto’ currency regulation for the next Congress. If Vermonters want to know how Rep. Becca Balint (should she be elected) will vote, the first place to look should be the regulation-friendly policy initiatives of her biggest financial supporter, FTX.”
An enduring appeal of cryptocurrency is its non-regulation. Government can’t declare an owner a Bad Actor and freeze an account, as it can and does with traditional currency holders. If Biden and Warren get their way, that would change – perhaps radically, in the opposite direction, crypto freedom advocates like Steve Bannon say.
At President Biden’s request, the Dept. of Treasury in September made four recommendations:
- “Advance work on a possible U.S. CBDC [Central Bank for Digital Currency]”
- “Encourage use of instant payment systems to support a more competitive, efficient, and inclusive U.S. payment landscape”
- “Establish a federal framework for payments regulation to protect users and the financial system”
- “Prioritize efforts to improve cross-border payments, both to enhance payment system efficiency and protect national security.”
As outlined by Pres. Biden in a March 9 executive order, these Treasury recommendations will form the basis of proposed legislation for the 2023 Congress. In which Balint, of course, will have a vote.
Early cryptocurrency ‘bitcoin’ adopters included Libertarians and anarchists who envisioned a new form of currency untouched and untouchable by the soiling hands of Big Government.
The free-market philosophy behind ‘bitcoin’ is much easier to explain than how it works. People with the tools and know-how may issue their own digital currency, the value of which is (somehow) established by an incredibly esoteric and energy-intensive ‘mining’ process employing blockchain software. At present the electricity consumed to operate and cool specialized ‘mining’ hardware is equivalent to the electricity consumption of the nation of Switzerland.
The People’s Republic of China has banned the use of cryptocurrency. President Biden apparently would prefer to regulate it.
Question #3: Will Becca Balint insist on investigation of whether laboratory failure caused the Covid-19 pandemic, and take steps to ensure laboratory failures don’t result in a future pandemic?
This is a real question because the founders of FTX care about more than crypto regulation. They also care about preventing laboratory errors leading to the next pandemic. Coinciding with the big FTX contribution, Becca Balint discovered that she, too, cared. As reported by VDC in August:
The Protecting Our Futures PAC – ostensibly to provide oversight of lab work to prevent a future pandemic – is funded by Sam Bankman-Fried, an FTX founder and MIT classmate of Singh. Not only did Bankman-Fried’s PAC endorse Balint, Bankman-Fried and his brother Gabe donated $2900 to the Balint campaign, the maximum amount, VTDigger reports.
Becca Balint. In addition to seeking the POF PAC endorsement and accepting the two brothers’ money, the campaign also published on its own website almost verbatim the PAC’s language on pandemic protection – the stated purpose of the PAC.
POF PAC website: “We must establish independent oversight of dual-use research including enforcement mechanisms to ensure safety and security.”
Balint website: “Establish independent oversight of labs conducting dual-use research of concern.”
Time will tell if candidate and laboratory quality assurance control reformer Becca Balint maintains her newfound commitment as a sitting member of Congress.