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Charles Hoskinson, one of the crypto industry’s best known entrepreneurs, has warned that the new digital assets platform promoted by Donald Trump and his sons could be “scary” for the industry.
Hoskinson, who co-founded the popular Ethereum blockchain, told the Financial Times he had reservations about the Trump-backed venture, announced on Monday. Trump, his sons Donald Trump Jr and Eric Trump and property developer Steve Witkoff are backing a decentralised finance (DeFi) platform called World Liberty Financial.
DeFi projects aim to offer financial services without an intermediary such as a bank or exchange. World Liberty Financial has promised to leave behind “slow and outdated big banks”, although full details are yet to be published.
“Trump is launching a DeFi application, and that’s scary to me as an industry, because everything Trump does the left hates with such a passion,” said Hoskinson, who also founded the Cardano blockchain, a rival to Ethereum. “He’s taken a bipartisan thing and he’s making it partisan.”
The Democrats “will attempt to weaponise the institutions of the United States to slow down and damage Trump. So I wouldn’t be surprised to see a Department of Justice investigation or [a tax] investigation or the SEC go after them” for the new platform, he said. “Then there’s a knock-on to the entire industry and it creates a lot of problems.”
His cautious comments come as Trump moves to reach out to an industry he once shunned, calling bitcoin a “scam”. In July, he promised to make the US “the bitcoin superpower of the world”, vowed to sack the chair of the Securities and Exchange Commission and end the “anti-crypto crusade” of President Joe Biden and Kamala Harris.
However, Hoskinson doubted either presidential candidate for the US election would foster a strong cryptocurrency industry in the country.
Trump has won support from influential crypto investors including venture capitalists Marc Andreessen and Ben Horowitz and Gemini exchange co-founders Tyler and Cameron Winklevoss, but others including the billionaire entrepreneurs Mark Cuban and Reid Hoffman are backing Harris.
“I don’t see that level of quality and sophistication in the discourse” with Trump or Kamala Harris in the crypto space,” Hoskinson said.
He said the former president may struggle to deliver his pro-crypto policy promises if elected in November.
Trump’s record of high staff turnover within his administration would make it difficult for him to bring the right people into government to develop the industry, said Hoskinson.
Harris “seems to be a continuation of the disastrous policies that Biden has with our industry”, he added.
Hoskinson said the US could gain “five to ten trillion worth of crypto stuff” over the next 10 years if the US passed legislation to bring clarity to the crypto market and “stop suing companies and closing bank accounts”.
He added he was much more positive about the legislative branch of US policymaking, saying he had enjoyed productive conversations with Senators including Republicans Tim Scott and Cynthia Lummis, and Democrat Ron Wyden.
Speaking in Singapore, Hoskinson said the city state was gaining an edge over rival Hong Kong as crypto centre because of its political neutrality.
His Inside Outside blockchain infrastructure research and engineering company, also known as IOHK, was launched in Hong Kong and also operates in Singapore.
“It’s been easier to exist in Singapore, and it breaks my heart . . . I’m saddened to see how Hong Kong has been absorbed into the political system of mainland China,” he said.
“There’s a growing distrust the west has with Hong Kong as a safe harbour of capitalism and more people are pivoting their business interests to Singapore.”
Hoskinson added: “Singapore has a unique opportunity to massively simplify things and embrace decentralised identity,” he said. “The government has to make a decision: is it a financial priority to attract these kinds of businesses? Dubai has made that a priority.”
Additional reporting by Alex Rogers in Washington
https://www.ft.com/content/7a497898-38b7-4e84-9e8a-c2469ebafdc1
