TITLE: Crypto Industry Lobbies Trump and His Allies to Capitalize on Election Wins
https://www.nytimes.com/2024/11/13/technology/trump-crypto-bitcoin.html
EXCERPTS: A cryptocurrency enthusiast as chair of the Securities and Exchange Commission. A presidential committee stacked with industry loyalists. And legislation to let crypto companies operate freely in the United States.
After years in the political wilderness, crypto executives are scrambling to execute a policy wish list that could fundamentally transform the industry’s standing in the United States. They are intensively lobbying President-elect Donald J. Trump and his allies, seeking to shape decisions about key personnel in the new administration and end a regulatory crackdown on crypto companies.
Many top executives are courting Howard Lutnick, a Bitcoin enthusiast who heads the financial firm Cantor Fitzgerald and is a co-chair of Mr. Trump’s transition team, according to more than a dozen crypto executives, some of whom requested anonymity to discuss sensitive political maneuvering.
Coinbase, the crypto exchange, has been coordinating with Mr. Trump’s transition team to arrange a conversation between Mr. Lutnick and Brian Armstrong, the company’s chief executive, two people with knowledge of the discussions said. Brad Garlinghouse, the chief executive of Ripple, another crypto firm, said he had spoken with people close to Mr. Trump about personnel decisions for the new administration. Executives at Circle, a large U.S. crypto firm, have also communicated with the transition team, a person with knowledge of the matter said.
The industry’s top priority is reshaping the S.E.C., which has aggressively pursued crypto firms in court. Among the candidates to run the agency is Dan Gallagher, the chief legal officer for Robinhood, the finance and crypto app, three people with knowledge of the matter said. Another candidate backed by the industry is Chris Giancarlo, a former regulator who has served as an adviser to crypto companies, one of the people said.
After every election, corporate leaders put on a full-court press to influence the transition. But the crypto world has particular reason for optimism. During the campaign, Mr. Trump, once an outspoken Bitcoin skeptic, said he had been converted into a believer and promised to end the S.E.C.’s legal crackdown. He and his family also started their own crypto business and stand to benefit personally from regulatory changes that industry executives have recommended.
The result is likely to be a drastic shift in U.S. policy toward the crypto industry, which has been tarnished by financial scandals, corporate bankruptcies and white-collar frauds that cost consumers billions of dollars in lost savings. Before the election, a set of super PACs financed by crypto executives spent about $135 million to influence more than 50 congressional races, helping elect dozens of pro-crypto candidates.
On Monday, the price of Bitcoin hit a new high of nearly $90,000, as investors expressed confidence that the industry’s political spending would translate to softer regulations.
The spending “sets a terrifying example of influence-peddling,” Lisa Gilbert, a co-president of the consumer group Public Citizen, said in a statement. “The sheer volume spent, and its effectiveness, teaches other corporate actors exactly the wrong lesson.”
Karoline Leavitt, a spokeswoman for the transition, said in a statement that Mr. Trump’s personnel decisions for the new administration would be “announced when they are made.” A spokeswoman for Coinbase declined to comment on Mr. Armstrong’s contact with Mr. Lutnick.
During the Biden administration, the crypto industry struggled to establish a foothold in Washington. The 2022 collapse of the FTX crypto exchange spooked some of the industry’s allies in Congress, and the S.E.C. sued large crypto companies like Coinbase, a legal offensive that threatened to push much of the industry offshore.
Now crypto executives are optimistic that the new leaders in Congress and the White House will advance many of the industry’s central aims.
“A lot of folks are trying to put together their wish lists and reach out to the campaign and the transition through different channels,” said Kristin Smith, the chief executive of the Blockchain Association, a crypto trade group. She said she was scheduled to speak at a crypto conference in Miami this week hosted by Mr. Lutnick’s firm and hoped to meet people in his orbit.
Other executives have been angling for introductions to Mr. Trump’s allies, calling anyone who might help them secure a spot on a crypto advisory council that the president-elect has promised to establish.
TITLE: Trump Will Take Over Federal Probe of a Crucial Tesla Product.
https://www.bloomberg.com/news/newsletters/2024-11-13/trump-will-take-over-federal-probe-of-a-crucial-tesla-product
EXCERPTS: The National Highway Traffic Safety Administration opened a defect investigation last month into a suite of features that Musk’s Tesla markets as Full Self-Driving, or FSD. Contrary to the name, FSD isn’t a self-driving system, as it requires constant human supervision and sudden interventions.
NHTSA is examining whether FSD fails to safely operate when fog, dust, glare and other conditions reduce visibility. The probe was initiated after four crashes in which FSD was engaged and contending with these conditions. In one of the incidents, a Tesla fatally struck a pedestrian.
While Musk suggested days after the investigation started that Tesla and his other companies have been subject to “lawfare” by federal regulators, defect probes are par for the course in the US. NHTSA has initiated 155 of them during Biden’s presidency, only modestly more than the 135 opened during Trump’s first term.
Tesla vehicles have been the subject of 12 defect investigations opened under Biden. NHTSA has initiated 23 queries into Ford vehicles under Biden, and opened more probes of Stellantis (18) and Honda (14) cars and trucks.
What makes the investigations of Teslas particularly noteworthy are questions around just how much power the carmaker’s CEO will assert in setting the future course of NHTSA and the Department of Transportation. Trump announced Tuesday that Musk will co-lead a new Department of Government Efficiency that he said will “dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures and restructure federal agencies.”
Assuming the Transportation Department and NHTSA survive the “shockwaves” Musk says he’ll send through Washington, none of the investigations into Tesla vehicles are more consequential than the one examining FSD.
Musk has leaned into the technology like never before in an effort to differentiate Tesla’s vehicles as sales have slipped. He’s cautioned against owning his company’s stock unless you’re a devotee (“If somebody doesn’t believe Tesla is going to solve autonomy, I think they should not be an investor in the company,” he said in April.) Tesla recognized $326 million in revenue last quarter linked to FSD, and some analysts expect software releases to eventually become the predominant generator of the company’s profits.
NHTSA has taken notice of Musk’s aggressive messaging.
In a filing posted to its website last week — two days after Kamala Harris conceded the presidential race to Trump — the agency attached an email that one of its officials sent to Tesla representatives in May. The official flagged seven of Tesla’s social media posts about FSD that had given the agency pause.
The posts showcased drivers who weren’t keeping their hands on the wheel while using FSD, and conveyed messages that conflicted with how Tesla messages to customers in owner’s manuals and elsewhere. NHTSA noted that an X user commented on one of the posts that they could see people getting home safely in a Tesla after drinking at a sporting event — an alarming conclusion to draw about a system that still holds the driver fully responsible for steering, stopping and going.
“While Tesla has the discretion to communicate with the public as it sees fit, we note that these posts show lost opportunities to temper enthusiasm for a new product with cautions on its proper use,” Gregory Magno, a division chief within NHTSA’s Office of Defects Investigation, wrote in the email.
Magno concluded the message in a way that was far from fire and brimstone.
“We request that Tesla revisit its communications to assure that its messaging is consistent with the statements made in its user instructions and appropriate to the level of capability deployed to the public roads,” he wrote.
Much has been written in the days since Trump’s victory about whether the president-elect will clear the way for Tesla to deploy robotaxis onto US roads. NHTSA’s investigation and Magno’s email suggest that investors who’ve added hundreds of billions of dollars to Tesla’s market capitalization in the last week may be getting ahead of themselves.
TITLE: Advertisers set to return to X as they seek favour with Elon Musk and Donald Trump
https://www.ft.com/content/34b6fc20-23f7-4e08-9ac4-ef05d5d66c13
EXCERPTS: Elon Musk’s support for Donald Trump is set to boost X’s flagging business, with some marketers poised for a return to the social media platform in order to seek favour with the incoming administration.
Media executives told the Financial Times that some brands were preparing to advertise on X once again, as its billionaire owner was likely to gain an influential role within a second Trump White House.
The platform’s revenues have fallen dramatically since Musk’s $44bn acquisition two years ago, with some investor estimates suggesting its current valuation is less than $10bn.
Brands have expressed concern that Musk has stripped back moderation, with groups like Disney, IBM and Apple leaving the platform last year. Musk has responded by telling big companies to “go fuck themselves” for pausing advertising.
But Lou Paskalis, chief executive of marketing consultancy AJL Advisory and a former media executive at Bank of America, said some marketers are likely to reallocate spending back to X as “political leverage”, such as if they were seeking government contracts. He added companies would seek to get in the “good graces of Elon”, who has been given a wide remit by Trump as co-head of a new Department of Government Efficiency.
“It could be seen as an official channel for White House communications,” said another advertising agency chief, adding that Trump’s victory has lent Musk new legitimacy as well as power over brands in sectors that could face new regulatory curbs from Trump.
Musk has predicted a comeback for X’s business after fervently backing Trump’s campaign through the platform and in more than $100mn in political donations. “Some of the boycott is starting to lift,” he told podcaster Joe Rogan ahead of the US elections, adding that “if Trump wins we’ll see . . . most of the boycott lift.”
The election has had a mixed impact on X’s audience and engagement, however.
According to Similarweb, X’s website had its best day for traffic in the US so far this year on Wednesday last week, the day after the US presidential vote, with election day itself coming in second. Daily active users for the app also jumped, its data showed.
However, it also found that 115,000 US users deleted their X accounts on Wednesday, the single biggest day for web account exits since it began tracking, while rivals such as Bluesky and Meta’s Threads also appear to have increased users.
Bolstering X’s flailing business will require work. Total US ad spend among the top 100 advertisers on X in the first half of 2024 was down 68 per cent compared with the first half of 2022, before Musk acquired the platform, according to estimates from market intelligence group Sensor Tower.
The data show that only 7 out of the top 200 advertisers on X that ceased ad spend in the final quarter of 2022 have returned to the platform in 2024. They have largely been replaced by advertisers that are completely new to X or did not exist in 2022, while spending significantly less than previous marketers.
Emarketer estimates the company will bring in $1.9bn in advertising revenue this year, down from $2bn last year and around $4.5bn in 2021, prior to the takeover. Musk has privately called chief executives of brands to berate them for leaving the site, while publicly singling out others such as Disney’s Bob Iger.
He has also taken legal action. In August, X filed a lawsuit against the Global Alliance for Responsible Media, a coalition of brands and advertising agencies, as well as members such as Unilever, Mars and CVS Health. It alleged the defendants had “colluded” to boycott X after Musk’s acquisition, limiting consumer choice in breach of antitrust laws.
Garm has since shut down, saying the claims “misconstrue its purpose” but “significantly drained its resources and finances”.
Industry insiders suggested the action was having an effect. Last month, after Unilever took up spending again on X last month, it was quickly dropped from the lawsuit. One advertiser said that their agency had been warned following the legal action to be careful about what they communicate in writing about the billionaire and X internally.
Other advertising chiefs said many brands will remain reluctant to trust X and argue its ads offering is inferior to rivals such as Meta and TikTok.
X has increasingly become a “an Elon echo chamber,” said a top executive at an advertising company. “It’s a cesspit and many clients do not want to be part of that.”
“Trump’s victory may well mean brands give X a second chance in 2025,” said Richard Exon, founder of ad agency Joint, but warned they “will be wise to proceed with extreme caution”.