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Charles Hoskinson, one of the crypto industry’s most well-known entrepreneurs, has warned that the new digital asset platform promoted by Donald Trump and his sons could be “scary” for the industry.
Hoskinson, co-founder of the popular Ethereum blockchain, told the Financial Times he had reservations about the Trump-backed project, announced on Monday. Trump, his sons Donald Trump Jr. and Eric Trump, and real estate developer Steve Witkoff are backing a decentralized finance (DeFi) platform called World Liberty Financial.
DeFi projects aim to offer financial services without an intermediary like a bank or exchange. World Liberty Financial has promised to ditch “slow, outdated big banks,” though full details have yet to be released.
“Trump launching a DeFi app, and that scares me as an industry because everything Trump does is hated by the left with such a passion,” said Hoskinson, who also founded Ethereum-rival blockchain Cardano. “He took something that was bipartisan and made it partisan.”
Democrats “will try to use American institutions as a weapon to slow down and harm Trump, so I wouldn’t be surprised to see a Justice Department investigation or a tax investigation or the SEC come after them” over the new platform, he said. “That would then have repercussions throughout the industry and create a lot of problems.”
His cautious remarks come as Trump prepares to reach out to an industry he once shunned, calling bitcoin a “scam.” In July, he promised to make the United States “the world’s bitcoin superpower,” vowed to fire the chairman of the Securities and Exchange Commission and end the “anti-crypto crusade” of President Joe Biden and Kamala Harris.
However, Hoskinson doubts that either candidate in the US presidential election can foster a strong cryptocurrency industry in the country.
Trump has won the support of influential cryptocurrency investors, including venture capitalists Marc Andreessen and Ben Horowitz and Gemini exchange co-founders Tyler and Cameron Winklevoss, but others, including 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 might struggle to deliver on his pro-crypto policy promises if elected in November.
The high turnover rate in the Trump administration would make it difficult for him to appoint the right people to government to grow the industry, Hoskinson said.
Harris “appears to be a continuation of the disastrous policies that Biden is pursuing with our industry,” he added.
Hoskinson said the United States could make “five to ten trillion dollars in cryptocurrency” over the next ten years if the U.S. passed legislation to clarify the cryptocurrency market and “stop suing companies and shutting down bank accounts.”
He added that he was much more positive about the legislative branch of American policymaking, saying he had had 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 advantage over rival Hong Kong as a crypto hub because of its political neutrality.
His blockchain infrastructure research and engineering company Inside Outside, also known as IOHK, was launched in Hong Kong and also operates in Singapore.
“It’s easier to exist in Singapore, and it breaks my heart… I’m saddened to see how Hong Kong has been absorbed into the mainland Chinese political system,” he said.
“The West is increasingly wary of Hong Kong as a safe haven for capitalism and more people are turning their business interests to Singapore.”
“Singapore has a unique opportunity to dramatically simplify things and embrace a decentralized identity,” he added. “The government has to make a decision: is it a financial priority to attract these types of companies? Dubai has made it a priority.”
Additional reporting by Alex Rogers in Washington
