A former policy lawyer for the cryptocurrency exchange Coinbase is running for New York State Attorney General. His campaign, representing the interests of the crypto industry, faces strong Democratic bias and concerns about the industry's influence on policy-making.
Khurram Dara, who previously served as the head of regulatory and policy at Bain Capital Crypto, announced his candidacy on November 21. In a video posted on the X platform, Dara stated that he aims to stop the current Attorney General Letitia James from what he calls a "legal war" against the crypto industry.
Dara claims that the unfair treatment of the industry has led to rising costs for New Yorkers. Recently, New York City mayor-elect Zohran Mamdani won the election by focusing on cost-of-living issues.
Dara's campaign faces significant resistance. James has won the last two elections by large margins, and there remains widespread concern about the influence of crypto lobbying groups on policy-making.
According to Dara, James's policies have harmed New York's business environment and driven up prices.
"When you use the law as a political tool, substituting enforcement for rule-making, and when you use lawsuits to create policies that increase operating costs, it raises legal and insurance costs; this drives up prices, hurting small businesses, new entrepreneurs, and working-class New Yorkers," Dara stated in his announcement video.
As Attorney General, Dara would limit the powers of New York's Martin Act. This act grants the Attorney General's office broad authority to investigate and prosecute securities and real estate fraud. Crucially, it allows the Attorney General to sue for actions that "harm the public interest" without needing to prove subjective intent or negligence.
Dara and other critics argue that James has used this act for her own political purposes rather than as a neutral enforcement tool.
During James's tenure, the Attorney General's office has initiated enforcement actions against several crypto companies, including Bitfinex and Tether's parent company iFinex. The Attorney General sued them for commingling customer and company funds to cover up the disappearance of $850 million. Her office also secured $50 million for investors defrauded in Gemini's Earn program.
Particularly critical for the crypto industry, Dara hopes to revisit the BitLicense—the regulatory framework for digital asset businesses in New York. The BitLicense has stricter standards for reporting, licensing, and compliance than other states. Dara and other critics claim these rules have driven crypto companies out of New York City. Dara referred to the BitLicense as "illegal" in his announcement video.
However, Dara's path remains steep. He is running as a Republican, and New York State has not had a Republican Attorney General in nearly 30 years. The last Republican to hold the position, Dennis Vacco, lost to Eliot Spitzer in 1998.
In 2018, when James was first elected to the position, she defeated her opponent Keith Wofford by nearly 20 percentage points. The gap narrowed in 2022, but she still won against Republican Michael Henry with 54.6% to 45.37%.
Beyond historical trends, the overall support for the Republican Party has declined nationwide, and New York City, a key metropolitan area that Attorney General candidates must appeal to, has just elected a progressive Democratic mayor, Zohran Mamdani.
Dara's challenge comes at a time when crypto lobbying groups are increasingly representing their interests in politics, with some of the most prominent participants becoming openly political.
Crypto lobbying groups played a significant role in the 2024 federal elections, donating nearly $250 million to campaigns across the country.
Since then, the industry's interests have been well represented in Washington. Landmark legislation, such as the GENIUS Act regulating stablecoins, has been passed. The industry is also pushing hard for Congress to pass the CLARITY/Responsible Financial Innovation Act by the end of the year.
Lobbying is pervasive in Washington; the crypto industry is no exception. Crypto lobbying operates at a rapid pace, raising concerns about "regulatory capture"—where regulatory agencies meant to serve the public interest are controlled by the industries they are supposed to regulate.
President Trump, who took office earlier this year, has nominated individuals closely tied to the crypto industry for important positions and key regulatory agencies. He has also pardoned several high-profile crypto executives, including former Binance CEO Changpeng Zhao and four executives from BitMEX, including Arthur Hayes.
Fundraising has also accelerated. Gemini founders Cameron and Tyler Winklevoss have already contributed tens of millions of dollars this year alone. Their funding has become partisan, with millions flowing to organizations dedicated to preserving the Republican Party's slim majority in Congress.
This trend has raised concerns among some in the industry that when the partisan pendulum eventually swings back toward the Democrats, the crypto industry, allied with the Republicans, may find itself in a precarious political situation.
Crypto-friendly Democratic Congressman Sam Liccardo told Politico in early October, "I don't think anyone in this city would suggest that an industry put all their eggs in one party's basket."
How the connections of cryptocurrency and its growing political ties will affect Dara's campaign remains to be seen. His campaign is still in its early stages; there seems to be no website, only a donation link with a campaign logo similar to the one used by Mamdani in his mayoral campaign.
Mamdani's lack of a stance on cryptocurrency does not seem to have affected his popularity among voters. Former Governor Andrew Cuomo's last-minute cryptocurrency strategy also failed to help him gain an advantage. New Yorkers' choices are likely to come down to other pressing issues.
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Original article: “Crypto Lawyer Faces Tough Challenge in New York Attorney General Race”
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