Biden and Trump are directly targeted by Crypto in its battle with the SEC.

• This year, the frustration of the crypto industry with Securities and Exchange Commission chair Gary Gensler's regulatory agenda has become more politically charged, as crypto investors aim to increase their influence in Washington.
• Trump has capitalized on this discontent, positioning himself as a cryptocurrency advocate and vowing that, if elected, regulators will "facilitate innovation" rather than hinder it.
• Some Biden allies are worried enough about the perception that Biden is anti-crypto and Trump is pro-crypto to bring their concerns directly to senior White House officials.

In San Francisco, on a cool, sunny June evening, a high-dollar, Republican political fundraiser took place at the Pacific Heights mansion of venture capitalist David Sacks, an event that is seldom seen in this progressive city.

On this evening, the guest of honor was former President Donald Trump, who gave formal speeches from a concealed stage to attendees who had paid up to $300,000 to be present.

If Trump becomes president in November, he intends to ease the regulation of cryptocurrencies and "get out of the way of innovation," according to someone who was present. After his speech, Trump invited the audience to share their thoughts.

Ripple's chief legal officer, Stuart Alderoty, revealed that the company had spent more than $100 million defending itself in lawsuits filed by the Securities and Exchange Commission.

According to a guest and another person familiar with the situation, who were granted anonymity to describe a private meeting, Alderoty's comment was intended to illustrate the impact of the SEC's regulatory actions under chairman Gary Gensler on his company and the industry as a whole.

Another crypto executive in the audience was Paul Grewal, the chief legal officer of a company also fighting the SEC.

In 2023, the SEC filed a complaint against Coinbase, the largest U.S. crypto exchange platform, accusing the company of violating securities laws by acting as an unregistered broker of digital currency tokens, which the SEC regulates as securities.

Both ongoing cases involve firms denying securities law violations. While Alderoty's comments at the Trump fundraiser have not been previously reported, he has made similar remarks elsewhere.

The political tone of the frustration with Gensler's regulatory agenda has intensified among crypto investors, who are determined to increase their influence in Washington through the 2024 election cycle.

In recent months, Trump has transformed from a crypto critic to a supporter, and early indications suggest that this change is gaining him support among the crypto community.

Those in the crypto industry who support Trump are taking a more proactive approach to shaping the agency in a potential future Trump administration, starting with the appointment of a new head.

According to three people with knowledge of the discussions, crypto investors have suggested several potential nominees for SEC commissioner if Trump is re-elected for a second term.

Two former chairs of the Commodity Futures Trading Commission during the Trump administration are J. Christopher Giancarlo and Heath Tarbert.

Another name that has emerged is Dan Gallagher, who was an SEC commissioner during Obama's presidency and is currently the chief legal officer at Robinhood.

Trump administration is considering Gallagher as a possible SEC chair, and he is honored by the opportunity.

He stated to CNBC that he was honored to hold different positions at the SEC, including that of commissioner.

"My deepest concern is for the agency, and I hope that any new SEC Chairman will prioritize market access and maintain the U.S.'s position as a leader in financial innovation."

According to three people with knowledge of the conversations, Paul Atkins is the fourth name that has been discussed with people close to Trump.

Under President George W. Bush, Atkins was the SEC commissioner and opposed the agency's policy of imposing significant fines on companies that violate securities laws. He later played a significant role on Trump's transition team in 2016, where he helped shape Trump's approach to financial regulation.

"According to Atkins, the SEC is in a state of disarray, and significant changes are necessary."

Trump and his team have not contacted Atkins regarding a potential role at the agency, according to Atkins. When asked if he would accept an SEC job if Trump wins, Atkins responded with uncertainty, saying "Who knows?"

The election of Trump would not solely determine the SEC and crypto policy, as other factors would also influence the commission's shape.

According to OpenSecrets, at least 16 former Trump administration officials now advocate for the crypto industry.

If the Trump administration were to return, they would likely be top contenders for key positions at the SEC, CFTC, and FTC, giving them the ability to shape crypto regulations.

Biden allies raise alarms

Democratic crypto investors must exercise caution when engaging with those in power, while the crypto industry can lobby Trump and his allies to prepare for a possible SEC overhaul.

Despite the SEC's independence from the White House, Gensler's approach to crypto has helped set the tone for broader administration policy.

Over the past three years, Gensler's critique of digital currencies has become increasingly harsh.

In a recent Bloomberg interview, Gensler stated that the crypto industry is a field where many of the prominent figures from a few years ago are currently either in jail, on the verge of going to jail, or awaiting extradition.

According to sources, some of Biden's allies are raising concerns about his perceived stance on cryptocurrency, which they believe is anti-crypto, and have taken their case directly to senior White House officials.

On June 14, Jeff Zients met with John Doerr, a venture capitalist, at Doerr's home in Woodside, Calif.

A person with direct knowledge of the gathering stated that over a dozen crypto enthusiasts were present to speak with Zients. Tech investor Ron Conway participated in the meeting.

Gensler's public remarks and policies on crypto have been blamed for the growing appeal of Trump to crypto holders, some guests told Zients.

It was suggested to Zients that Gensler should not be the sole representative of the Biden administration's crypto policy, as his statements could cause crypto holders to support Trump rather than Biden.

The SEC declined to comment on CNBC's request.

For over a decade, Doerr and Conway have been supporters of Democrats, including Biden. In February, Doerr hosted a fundraiser for Biden. According to Federal Election Commission records, Conway has given $600,000 to pro-Biden political action committee Future Forward.

Both Doerr and Conway have investments in crypto, with Conway's venture capital firm SV Angel listing Coinbase as part of its portfolio, and Doerr's Kleiner Perkins having been investors in crypto businesses for years, including recently supporting a $2 million seed round for cryptocurrency data analytics startup, Skew.

The president's handling of crypto was defended by a White House spokeswoman, who stated that administration officials regularly meet with stakeholders in the industry.

Robyn Patterson, a White House spokeswoman, stated that President Biden launched the first comprehensive approach to promoting innovation in digital assets while safeguarding consumers and investors from the risks associated with emerging technologies.

The White House did not respond to warnings about their treatment of the crypto industry or follow up requests about Zients' meeting at Doerr's home.

Conway and Doerr did not return requests for comment.