Crypto spending big but thinking small on the campaign trail

Crypto still thinking small
I'll give the crypto industry this much: they're not giving up, our Claire Williams reports. After the rather public failure of their attempt to get a law passed regulating digital assets, the industry is keeping its checkbook open in an attempt to influence November's Congressional elections and, I imagine, get something passed in the next Congress.

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It's not exactly clear how much money the industry has donated in total (put a pin in that, I want to come back to it), but it's several million at least. The crypto lobbying vessel Fairshake (which in turn gets most of its money from Coinbase, Ripple, and the VC firm Andreessen Horowitz) has donated at least $1 million to three Republicans in the House: French Hill (chair of the Financial Services Committee), Bill Huizenga and Bryan Steil.

Still, observers think the spending is more defensive than offensive. The industry sees the math of how the election is going and is not so much trying to get "its" people elected than it is trying to keep some of its people in seats in order to stanch any backlash after whatever expected wave of Democrats take back the House and possibly even the Senate. 

I don't think it's going to matter. I've said this before in this space but the lack of regulatory clarity is not the thing holding crypto back. The thing holding crypto back is that rather than build any useful product the industry went all in on the casino model and thus appeals only to degenerate gamblers, Wall Street traders and other assorted YOLO'ers. It's no coincidence that the crypto and prediction market worlds have such heavy overlap.

Many years ago, I once quipped on Twitter that the best way to make money in politics transparent would be to force lawmakers to accept bitcoin, and only bitcoin, for campaign contributions. The quip was a joke because it wasn't a realistic proposal, but it wasn't a joke because it couldn't work. The reason being that bitcoin is famously traceable. You could actually rig a campaign-contribution system around bitcoin or some other stablecoin and have it be 100% transparent. We'd know where every dime was coming from the second it changed hands. And, yes, there are ways to obfuscate, but there would be ways around that, too. Now that would be a useful product.

So it's very ironic to me at least that an industry that has this potentially revolutionary technology has fallen into the same old pattern as every other industry and is playing the same old political game. It's a bit of a disappointment, really.

BofA's big bill
The U.S. government dropped a bomb on Bank of America's earnings. Regulators imposed about $2 billion in fines on the  bank, which reported third-quarter earnings this morning, for violations of anti-money laundering rules, our Ebrima Santos Sanneh reported. The biggest chunk, $1.2 billion, was levied by the Treasury Department. The Office of the Comptroller of the Currency added $750 million in civil penalties.

It's a big fine but did little to dent the nation's second-largest bank. BofA reported a third-quarter profit of $6.9 billion, including the Treasury fine. If you do the math, the fines in total cost BofA about one month's worth of profits. 

Which just goes to show that the obsession with the proverbial fortress balance sheet really does work. It protects you from interest-rate risk, economic calamity and even regulatory scrutiny.

Oh, Pooh
On this day one hundred years ago, A.A. Milne's "Winnie the Pooh" was published in both the U.K. and U.S. The children's story of the heart-warming bear and his friends has become a cultural icon, and was famously inspired by an actual stuffed bear and his friends Piglet, Eeyore and Tigger that the author has bought for his son, Christopher Robin. 

If you're in midtown Manhattan and have some time on your hands, the Public Library on 42nd Street has an exhibit celebrating the book that includes Christopher Robin's original Pooh Bear and his friends, as well as other items related to the book in the library's collection. I've already been there and recommend it if you read the book as a child or have read it to your kids, which I imagine is just about everybody.