How Silicon Valley Humiliated the Democrats

For decades, democratic leadership has tried to market its willingness to craft pro-corporate policy as political sophistication. Last summer, 2028 presidential hopeful Ruben Gallego championed the GENIUS Act, a bill that deregulates parts of the cryptocurrency industry, which directly benefits one of Trump’s crypto firms. At a 2025 forum, Gallego repeated a vague, starry-eyed, crypto industry talking point, saying of an industry whose customers lost an estimated $17 billion that year due to scams; saying of crypto, “It’s like seeing the advent of the internet and social media again.”

Democrats’ eagerness to please industry is also evident in the past few years of revolving-door hires from the Beltway to Big Tech: President Barack Obama’s press secretary Jay Carney spent seven years at Amazon and now works at Airbnb. The Coinbase advisory council is stacked with a dozen Democrats, including Tim Ryan and Biden’s pollster John Anzalone. Stephanie Cutter, a key Democratic comms strategist and Sunday show mainstay, is now at the gambling firm (they refer to themselves as “prediction markets”) Kalshi. Meanwhile, Elizabeth Kelly, who worked in the Biden White House in artificial intelligence is now at Anthropic.

The open courting of Big Tech and Big Finance by Democratic leadership has always been sold as savvy. But after a series of bruising election losses and open hostility from the industries they once hoped to court, the strategy has done little but make the Democrats look more like impressionable rubes.

Despite wild claims by venture capitalists like Marc Andreessen that the Biden administration was their adversary, the Biden White House desperately wanted to be liked by Silicon Valley—and monied venture capitalists in particular. I worked in the Biden administration at the Consumer Financial Protection Bureau with a focus on Big Tech and cryptocurrency. The Biden White House hosted multiple crypto round tables that featured the CEOs of cryptocurrency firms, such as Sam Bankman-Fried (now serving a 25-year prison sentence for an $8 billion fraud) and wealthy tech venture capitalists like Rob Conway.

I was one of the many regulators at different financial agencies invited to these gatherings, which I found to be extremely embarrassing for the White House. These “listening sessions” lent credibility to industries that I, and many others, suspected were openly conning the administration. What’s worse, this embrace of crypto, in particular, by the White House happened despite the industry’s glaring adoption of the tech subculture’s racism and misogyny, which run squarely in opposition to core democratic values. Kraken’s CEO told staff he thought white people should be able to use the n-word at work, while Coinbase’s CEO Brian Armstrong banned the phrase “Black Lives Matter” among his workforce, and a Coinbase official posted a public apology to the Pepe the Frog “community” when Coinbase sent a newsletter mentioning that Pepe had become associated with antisemitism. After Trump was reelected in 2024, Coinbase rushed to add the crypto token PEPE back to its product list.

But then came a series of humbling bankruptcies in the cryptocurrency space in the summer of 2022—Terra Luna, Celsius, Nexo, Three Arrows Capital. In the fall, news broke that FTX’s Bankman-Fried, who was hailed as a wunderkind by the likes of President Bill Clinton and the financial press, had been stealing billions of dollars from his users.

Around that same time, Silicon Valley Bank, or SVB—the darling of venture capital firms and the bank of choice of many large crypto firms—began to teeter. One of the bank’s largest depositors was the firm Circle, a company that works closely with Coinbase and offers a so-called “stablecoin,” a form of crypto money that claims to be tied to the value of a dollar. This “future of finance” institution had $3 billion stowed away at SVB, which far exceeds the $250,000 per account the FDIC insures per customer in case of a bank failure. Circle had committed a kindergarten-level financial mistake and put all its eggs in one basket. It was Silicon Valley Bank’s biggest client; the firm that stood to lose the most if SVB wasn’t bailed out.

The Biden administration was faced with a choice. It could simply allow the bank to fail—after all, it had few interconnections with the economy, and very few consumer, middle-class, or low-income clients. Or it could heed the panicked, loud, and insistent pleas for a rescue and a bailout from the bank’s numerous plutocratic clients, such as the wealthy tech titan David Sacks. The Biden admin chose a bailout.

What did the Democrats get in return? The bailout beneficiaries, Sacks included, backed Donald Trump with their rescued money and their time. Sacks, along with many other beneficiaries of the SVB bailout, endorsed Trump. Until recently, Sacks served as Trump’s White House crypto and AI czar. In V.C. parlance, they “cucked” the Biden administration.

Having been so utterly pantsed in public, one would assume that the Democrats would have learned a hard lesson. Alas, they have not. Under the leadership of Chuck Schumer, and with the assistance of Senators Kirsten Gillibrand and Ruben Gallego, their losing strategy of sucking up to these backstabbing elites continues. With the party’s support for a bill called the CLARITY Act, it continues to court the same crypto firms who owe their wealth to Democrats but who largely contribute to MAGA politicians and ideologies—and who seek the destruction of the Consumer Financial Protection Bureau, which was Democrats’ North Star coming out of the financial crisis.

Not everyone in the Biden administration was fooled by crypto’s hype and the industry’s impossible promises (not to mention its laughably bad technology). Under Chair Gary Gensler, the Securities and Exchange Commission pursued lawsuits against the likes of Coinbase, Binance, and others for violating securities laws. Gensler became the crypto community’s constant boogeyman, subject to memes and comparisons to Darth Vader.

Rather than have the SEC’s back as it doggedly tried to enforce securities laws against firms that had openly declared the rules didn’t apply to them, Undersecretary Nellie Liang at the Treasury Department actively negotiated with Republicans in Congress on legislation many financial regulators strongly opposed. It was a repeat of another failed attempt at stopping speculative manias before they started: In the Clinton administration, CFTC Chair Brooksley Born attempted to regulate the new forms of derivatives being churned out by Wall Street but was stymied by Larry Summers and Robert Rubin.

In short, Biden naïvely followed a path of least resistance, trying in vain to placate the very tech CEOs who then worked with Donald Trump to brutalize the federal workforce and gut entire agencies. Democrats need to break from this path and acknowledge that billionaires—especially those in the increasingly antidemocratic tech sector—are never going to side with them over the GOP. Democrats need to reject tech founders and their energy-hungry data centers that no one wants, and which have drawn grassroots opposition from the local communities caught in Big Tech’s rampage path. This is one of the best ways that Democrats can shed the identity of being Republicans-lite, where Silicon Valley’s robber barons are concerned, and one of the only ways they can truly make good policy for the multiracial, multiclass base they so badly need to win back.