Crypto is betting it all on the 2024 elections
“Crypto has spent a record $119 million in the 2024 federal elections, magnitudes more than it has ever spent before. This huge number means that crypto accounts for almost half of all corporate political contributions in this cycle. Its spending since 2010, totaling $129 million, puts the industry second only to fossil fuels, according to a report from the progressive consumer advocacy group Public Citizen.
“It’s already 15 percent of all known corporate contributions since the Citizens United ruling,” says Rick Claypool, a research director at Public Citizen who authored the report on crypto election spending, referring to the landmark 2010 Supreme Court decision that opened the floodgates for virtually unlimited corporate spending in elections through outside groups.
Crypto’s ballooning political war chest and voracious appetite to dangle money in front of lawmakers speaks to the power it has amassed over the past decade and a half, even as it has struggled to gain any real traction with the public.
Three-quarters of Americans who’ve heard of crypto aren’t confident in its safety and reliability, a 2023 Pew Research survey found, and only 7 percent of Americans used crypto last year, according to the Federal Reserve. Crypto’s reputation suffered in particular from the controversy surrounding crypto companies in the last few years, especially the catastrophic meltdown of FTX. Though the first cryptocurrency was launched in 2009, it still hasn’t penetrated as a mainstream payment method, with very few retailers allowing customers to pay directly with cryptocurrency. It remains mostly a vehicle for speculative investment.
Despite that — or because of it — crypto companies have redoubled their efforts to help elect pro-crypto politicians and lobby for policies that would boost the sector’s growth. The industry wants the influx of money it’s spending to send the clear message that the crypto craze isn’t over — and in fact, isn’t a craze at all, but the lasting future of finance. “Crypto is here to stay,” Paul Grewal, Coinbase’s chief legal officer, recently wrote in public comments regarding regulation.
The sector’s most strident champions want you to believe that it’s a key issue for voters in the upcoming election, right next to inflation and health care. The industry is shouting from the rooftops that politicians can’t ignore crypto — and trying its hardest to make sure we won’t be able to either.”
…
“After a rough few years of being walloped by scandals and government crackdowns, crypto is facing an existential crisis. There are already some patchwork regulations governing the world of digital currencies, but one key issue remains hotly debated: Which government agency should oversee them?
In the US, securities like stocks and bonds have to be registered with the Securities and Exchange Commission (SEC), which comes with a host of disclosure requirements and other rules to protect investors.
As far as the SEC is concerned, the law already puts most cryptocurrencies squarely under its purview, and the agency has been aggressively pursuing enforcement against crypto exchanges like Coinbase and Binance, alleging that they’re running unregistered securities exchanges. But the crypto industry doesn’t want to be regulated by the SEC — it wants to fall under the Commodity Futures Trading Commission (CFTC) instead.
“The CFTC is a much smaller agency with far fewer resources,” says Molly White, a crypto researcher and critic who has been tracking the industry’s political spending.”
…
“One major change this election cycle is how much more visible and vocal the Trump-supporting faction of crypto proponents has become. Cameron and Tyler Winklevoss, who founded the crypto exchange Gemini, tried to donate roughly $1 million worth of bitcoin each directly to the Trump campaign, apparently unaware it would exceed the FEC contribution limit. Venture capitalists Marc Andreessen and Ben Horowitz have both affirmed that they’re joining Team Trump too. Other backers include Jesse Powell, co-founder of the crypto exchange Kraken, and Charles Hoskinson, co-founder of the ethereum blockchain.
It’s worth noting that when Bankman-Fried was still the biggest face of crypto, he was known as a Democratic megadonor. We only found out later that he’d contributed roughly the same amount to Republicans through dark money groups.
Trump, for his part, was a harsh crypto critic in the past, but has recently done a 180, saying he would end Biden’s “war on crypto,” and that he would fire Gensler, the SEC chair. He even recently announced a family crypto project, run by the Trump Organization, called The DeFiant Ones — a play on “decentralized finance” — that would, according to Trump, help Americans who have been “squeezed by the big banks and financial elites.”
But crypto’s partisan inclinations are more complicated than simply supporting Republicans.
The industry’s spending is funneled mostly through the pro-crypto super PAC Fairshake, which has already spent $93.8 million this election cycle and is the second best-funded super PAC in the election, after Trump-backing Make America Great Again Inc. Fairshake’s backers include Coinbase, which has contributed a total of $50 million to the 2024 elections so far, and Ripple, a blockchain payment network that spent $49 million. (Both Coinbase and Ripple have faced SEC lawsuits.) Venture capital firm Andreessen Horowitz has also contributed $47 million to Fairshake.
Fairshake largely focuses on House and Senate races, and has been largely nonpartisan, supporting and opposing politicians of both parties based on their crypto stance.”
https://www.vox.com/money/371597/crypto-politics-spending-2024-elections-trump