Can Democrats and Big Tech Get Back Together?
Despite the various frictions, America's technology sector did pretty well during Joe Biden's presidency — and despite the various warnings about his mercurial opponent, many tech executives supported Donald Trump in his 2024 campaign. After his victory, even more rushed to Trump's side, with Meta founder and CEO Mark Zuckerberg going on Joe Rogan's podcast to talk about his admiration for the president-elect and the need for more ' masculine energy ' in US corporate culture.
Then came the Liberation Day tariffs, and then Obliteration Day in markets, and finally the Equivocation Day partial tariff rollback. Meanwhile Meta shares are trading below their price on the day of Zuckerberg's appearance on Rogan. It turns out that whatever the merits of masculine energy, a global trade war is not good for the tech industry.
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8 minutes ago
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Liz Warren Says Crypto Bill Creates a ‘Superhighway' for Trump Corruption
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It sounds like a step in the right direction, but this piece of legislation is working its way through Congress as sitting President Donald Trump and his family build a cryptocurrency empire that steamrolls anti-corruption laws and ethical norms — one they hope will flourish under the industry-friendly policies and laws created by the administration of the Trump patriarch. One of Trump's priorities has been the normalization of these so-called stablecoins — a type of asset that his family is now hawking. Despite the moniker, stablecoins can be extremely unstable. A 2023 study published by the Bank for International Settlements found that of 60 stablecoins analyzed in their review, all of them had become de-pegged from their underlying asset at least once. The 2022 crypto crash was triggered by the failure of Terraform Lab's Terra/Luna 'algorithmic' stablecoin — the collapse of which saw $45 billion erased in the span of a week. The stablecoin bill comes as the government reorients its approach to crypto. Under the Biden administration, crypto kingpins began to feel the sting of consequences for schemes gone wrong. FTX crypto exchange founder Sam Bankman-Fried was sentenced to 25 years in prison after carrying out one of the largest financial scams since Enron. Tether, the largest stablecoin in crypto, settled a lawsuit brought against it by New York Attorney General Letitia James in 2021. Changpeng Zhao, the founder of the global crypto exchange Binance, pleaded guilty to money laundering in 2023. Trump pledged a new, friendlier regulatory environment in Washington — and the crypto industry poured many millions into Super PACs to elect allies throughout Congress. Now, the industry has its moment to push through a public smokescreen of barely-there regulation, while continuing to rake in the cash. No one has been more outspoken on the failings of the GENIUS Act than Sen. Elizabeth Warren (D-Mass.), who told Rolling Stone ahead of key votes that the bill would 'create a superhighway for Donald Trump's corruption.' The Trump family's cryptocurrency venture, World Liberty Financial — which is currently being operated by his sons and Zach Witkoff, the son of Trump's Middle East envoy Steve Witkoff — recently launched its own stablecoin, designated USD1, which is pegged to the U.S. dollar and backed by treasury bonds. The GENIUS Act would allow major tech companies, banks, and other financial institutions to issue their own stablecoins, and many are poised to buy Treasury bonds so they can back the digital currency with real assets, as is required. According to a report issued last week by ARK Invest, the stablecoin market may become one of the largest holders of U.S. debt in the coming years — potentially tying large swaths of U.S. debt to a dubiously regulated and often unstable asset. 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They want the imprimatur, they want the gold seal of the United States government. … They don't actually want the government to oversee the activities of the industry.' Warren is not alone in her concerns, and has found an unexpected ally in Republican Sen. John Hawley of Missouri. Last week, Hawley described the GENIUS Act as a 'huge giveaway to Big Tech' that would effectively allow private tech companies to create their own currencies that compete with the dollar. 'The U.S. dollar is the reserve currency,' Warren says. 'The United States does not gain from creating a competing electronic currency. Getting more people to hold stable coins rather than dollars during their investment transactions, does not serve us interests, but it injects risk into the U.S.' 'Anyone who thinks that when a financial crash hits [the value of stablecoins] will translate one to one into dollars is fooling themselves,' she adds. The ripple effects can be catastrophic when a stablecoin collapses. 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