Business
Column: Most Americans have a negative view of crypto. So why are political campaigns rushing to embrace it?
The last year hasn’t been a very happy period in the cryptocurrency world.
News about the asset class has been almost invariably dire, full of reports of the fallout from bankruptcies among crypto firms, criminal convictions and sentencings of former crypto kings and other legal setbacks.
Yet there is one bright spot for the sector: In this election year, politicians are lining up to embrace crypto.
Many people who hold crypto…probably don’t identify as crypto advocates at all.
— Crypto critic Molly White
Some Democrats and Republicans have been long-term supporters of crypto. Among them is Rep. Ro Khanna (D-Fremont), who last month joined 13 of his Democratic colleagues in Congress to urge the Democratic National Committee to “take a forward-looking approach to digital assets and blockchain technology.”
Their letter to the DNC argued, implausibly, that these technologies will “have an outsized impact in ensuring victories up and down the ballot.”
Others are recent converts. Consider Eric Hovde of Wisconsin, who is running for the GOP nomination to challenge incumbent Democratic Sen. Tammy Baldwin this year. In 2021, when he was chairman and chief executive of Sunwest Bank, Hovde told an economic forum that the crypto market was “insanity…. There’s nothing backing it…. There’s nothing here.”
Hovde has since changed his tune. Last month he told Politico, “I support decentralized finance, and see Bitcoin as an asset for the future and fully support the community.” The industry lobbying organization Stand with Crypto designated him as “Very Pro-Crypto” on its website.
The industry’s big catch was Donald Trump. Back in 2021, he labeled crypto “a scam” in an interview on Fox News. “Bitcoin, it just seems like a scam,” he said. “I don’t like it because it’s another currency competing against the dollar.”
But there he was last month in Nashville, delivering the keynote address at the Bitcoin 2024 industry conference. He promised to fire Securities and Exchange Commission Chair Gary Gensler, a decided critic of crypto, if he’s releected president. (Trump would have no authority to fire Gensler before the latter’s SEC term runs out in June 2026.)
And Trump vowed to commute the 2015 life sentence of Ross Ulbricht, the creator of the crypto site Silk Road, who was convicted on charges of running what federal prosecutors called a “sprawling black-market bazaar” for drugs and other illegal goods. And he pledged to create a national “strategic reserve” of bitcoin, an idea that makes no coherent economic sense.
Even the campaign of Kamala Harris is treading carefully. Harris’ aides have approached leading crypto firms in quest of a “reset” of relations with the sector, according to the Financial Times. Those relations have been soured by Gensler’s anti-crypto initiatives and a general lack of enthusiasm for crypto in the Biden White House.
These developments are the offspring of a vast political campaign by crypto advocates. The campaign has two main elements. One is that feature common to all special interest campaigns: Money, dispensed by the pantload to current or wannabe members of Congress as well as aspirants to other positions, such as the presidency.
The other feature is deception. Crypto advocates have relentlessly flogged a claim that 52 million adult Americans are “crypto owners,” supposedly a single-issue voting bloc that politicians need to recognize.
The figure, which comes from a poll commissioned by the crypto firm Coinbase and would be equivalent to about 20% of the U.S. adult population, is manifestly absurd. As I’ve reported before, it’s flatly contradicted by a survey from the Federal Reserve System, which found that only 7% of adults had “bought or held” crypto in 2023. That would place ownership at about 18 million adults.
Moreover, the Fed found that ownership had declined sharply in recent years, down from 11% of adults in 2021. In 2023, only 1% of adults had used crypto to buy anything or make a payment (down from 2% in 2021).
That points to a fundamental truth about crypto: No one has yet identified a serious use for it in the real world — or at least in the world of legitimate finance. Crypto remains the tender of choice for criminals, including ransomware gangs.
What the crypto camp typically fails to acknowledge is that, for Americans outside of that shrinking cadre of holders, crypto emits a foul stench. According to a survey published in March, 61% to 77% of voters in six key swing states (Arizona, Michigan, Montana, Ohio, Nevada and Pennsylvania) have a negative perception of crypto.
(This was a survey commissioned by Digital Currency Group, a big crypto investor, which fiddled the findings by saying they showed that “more than three-in-ten [voters in those states] report positive feelings toward crypto.”)
How strongly do even pro-crypto voters feel about it as a political issue? Not very, probably. Molly White, that indispensable and indefatigable chronicler of newfangled financial technology, conjectures that “many people who hold crypto … probably don’t identify as crypto advocates at all.”
They’re more likely “worried about the climate, or their right to own firearms, or the safety and support of transgender people, … or their ability to obtain an abortion or retain access to contraceptives, or access to school vouchers, or any of the many other issues that factor in when people choose which candidates to support and oppose.”
The single-minded advocacy for crypto really comes only from a handful of financial types deeply invested in crypto for their own purposes.
There’s no doubt that they have lots of money to spend. The leading crypto campaign fund, Fairshake, has reported nearly $203 million in contributions as of June 30.
Fairshake spent more than $10 million starting last year in opposition to Rep. Katie Porter (D-Irvine) in her race for the Democratic nomination for U.S. Senate and Rep. Jamal Bowman (D-N.Y.) in his primary race for reelection. As it happens, both lost.
Porter was associated with Sen. Elizabeth Warren (D-Mass.) as a vociferous critic of crypto. Her victorious opponent in the primary, Rep. Adam B. Schiff, had taken a much more indulgent position, listing crypto among the “new developments in technology … we need to grow” in order to keep jobs and regulatory oversight in U.S. hands. Bowman had voted against a series of anti-crypto bills in the House.
Fairshake has smiled upon lawmakers who see things through crypto-colored glasses.
Among its top recipients in the current election cycle is Rep. Patrick McHenry (R-N.C.), who as chairman of the House Financial Services Committee pushed through a bill known as FIT21 that would take crypto regulation out of SEC hands and deliver it to the Commodity Futures Trading Commission, which is chronically underfunded and understaffed. (The measure hasn’t been taken up by the Senate.)
McHenry’s campaign has received $126,626 from the fund as of July 31, even though he has announced that he is not running for reelection this year and retiring from Congress.
Fairshake is nothing like a grassroots fundraising operation. Of its $203 million, more than $160 million has come from six major crypto firms or investors, including Coinbase ($46.5 million), Ripple ($50 million), the venture firm Andreessen Horowitz ($44 million) and the firm led by Cameron and Tyler Winklevoss ($5 million), according to Open Secrets. Marc Andreessen, his partner Ben Horowitz and the Winklevoss twins have stated publicly that they plan further contributions in support of Trump.
Crypto spending on the election needs to be watched carefully. This isn’t an industry crucial for American economic development, notwithstanding its supporters’ assertions about its importance to financial innovation. So far, crypto hasn’t advanced the cause of innovation other than giving drug lords and criminal gangs a new way to ply their trades and swindle their marks.
Trump was right when he called bitcoin a scam, and Gensler was right when he called out the sector’s “record of failures, frauds, and bankruptcies,” which occurred “because many players in the crypto industry don’t play by the rules.”
Like other businesses — legitimate and not so legitimate — that have mustered their millions in election campaigns, the crypto gang wants new rules to be written in its own interest.
The victims will be ordinary Americans who have been taken in crypto cons of one variety or another. Just because crypto users in the U.S. don’t really number 52 million, it doesn’t mean the rest of us shouldn’t be protected from a new breed of financial predator.
Business
Waymo reports teen riders for bad behavior and delivers them to the police
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
Business
Orange County real estate investor pleads not guilty in $100 million bank fraud case
An Orange County real estate investor accused of criminally defrauding an Arizona bank of nearly $100 million pleaded not guilty Monday and remains in custody.
Mahender Makhijani, 44, of Corona del Mar — who also was ordered by an arbitrator to pay $1.34 billion in a separate civil fraud case — was arraigned in Santa Ana federal court on two charges.
He is accused of bank fraud and making a false statement to a bank in a June 8 case involving a $100 million real estate loan made by Phoenix-based Western Alliance Bank. He was taken into custody on June 10.
Makhijani is accused of providing bogus collateral for the October 2024 loan now in default. In a civil lawsuit, Western Alliance said the outstanding balance as nearly $99 million.
Prosecutors say he falsified title insurance policies that showed the bank would have a first lien on the underlying collateral if the loan went bad, when in fact it did not.
A trial was set for August 11 before U.S. District Judge David O. Carter in Santa Ana.
Michael Schachter, his criminal defense attorney, did not respond to messages seeking comment.
In the civil case, an arbitrator in May ordered Makhijani to pay Laguna Beach real estate mogul Mohammad Honarkar $1.34 billion after ruling he had fraudulently induced him into a 2021 joint venture — and then wrested control and lost to creditors more than two dozen properties Honarkar had owned.
Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.
Prosecutors sought to hold Makhijani without bail after his arrest.
The affidavit noted he is a legal Indian immigrant with a home and bank accounts in that country, has access to private jets and threatened to “run away” if caught in a difficult situation.
The request was denied and he was granted $500,000 bail.
However, Makhijani remains in custody after a hearing sought by prosecutors last month before Magistrate Judge Autumn Spaeth.
The judge declined to accept a $450,000 cashier’s check submitted by a Makhijani associate for the bail, finding insufficient proof the source of the funds was legitimate, according to court records.
Makhijani is not prominent outside Orange County real estate circles, but he established a thriving distressed-assets business over the last decade that attracted prominent Southern California real estate investors.
Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.
As of last month, prosecutors had not fully traced his assets, which they believe are not held in his name and some of which may be in India.
The businessman employed an array of shell companies and strawmen to sign documents on his behalf, and to stand in for him as operators of his companies, according to the affidavit.
Makhijani told an associate he took extra precautions because wanted to insulate himself from litigation and that “they were sharks in the distressed world who took advantage of people,” the affidavit stated.
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