Unprecedented Election 'Cash Power': The Crypto Industry Is Fighting a Survival Battle
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Unprecedented Election 'Cash Power': The Crypto Industry Is Fighting a Survival Battle
The crypto industry has amassed a huge amount of "war chest" funding and is actively working to elect crypto-friendly politicians.
Navigating Web3 tides with focused insightsSource: The Wall Street Journal
Translation: BitpushNews Mary Liu
After regulatory crackdowns, cryptocurrency companies are fighting for survival. Their latest strategy: unleashing financial power in the 2024 U.S. election.
The crypto industry has amassed a massive "war chest" and is actively pushing for pro-crypto politicians. Three super political action committees (PACs) have collectively raised over $85 million, making them the top fundraisers among PACs involved in the 2024 election.
Fairshake and two affiliated super PACs began fundraising from major industry players, including cryptocurrency exchange Coinbase Global and Cathie Wood's ARK Invest. A rebound in the crypto market and surging token prices have further boosted these efforts.
Kristin Smith, CEO of the Blockchain Association, said: "This is the first time we’ve truly gotten everything in place."
Kristin Smith
Billionaire investors and large corporations have long used campaign donations and lobbyists to gain influence in Washington.
What makes the crypto industry’s move this year different is that its ability to continue developing in the U.S. is under threat. With the SEC filing civil lawsuits alleging violations of securities laws and criminal charges brought by the Justice Department, some companies have sought growth overseas or relocated entirely.
Earlier this month, former U.S. President Donald Trump was asked what he would do, if re-elected, to prevent crypto companies from leaving America.
At his private Mar-a-Lago estate in Florida, Trump voiced support for the industry, saying: "If we're going to accept it, then we have to keep them here."
Fairshake has not yet commented on the presidential race.
Phil Potter, former chief strategy officer at Bitfinex, donated 33 bitcoins to Fairshake last summer—worth about $1 million at the time.
Previous attempts by crypto advocates to influence elections lacked sufficient funding.
In 2022, FTX founder Sam Bankman-Fried donated to PACs and ultimately raised $12 million. Earlier this year, a federal judge sentenced Bankman-Fried to 25 years in prison on multiple fraud charges.
This cycle is different. After a series of lawsuits launched by the Securities and Exchange Commission, the industry has unprecedented unity. Crypto companies have hired more lobbyists and are working hard to convince lawmakers that Bankman-Fried’s FTX does not represent the broader industry.
Launched at the end of last year, Fairshake has taken a leading role in this effort. The group brings together top players in the crypto space, including Kraken’s parent company, venture capital firm Andreessen Horowitz, and stablecoin issuer Circle Internet Financial.
So far, much of the effort has focused on Congress. The industry is backing legislation to regulate stablecoins—cryptocurrencies pegged to the dollar—which would make it easier for users to deposit and withdraw funds from exchanges. The proposed legislation would establish rules for issuers, including requiring tokens to be fully backed by reserves.
Brian Armstrong, CEO of Coinbase Global, speaks at the Stand With Crypto rally in March.
Fairshake raises funds through both cash and cryptocurrency donations. Phil Potter, former chief strategy officer at Bitfinex, donated 33 bitcoins to the PAC last summer—equivalent to about $1 million.
A Fairshake spokesperson said the tokens have been sold for cash.
Fairshake says it has spent $25 million so far in the current election cycle. Earlier this year, it launched its largest spending spree to date, aiming to defeat California Representative Katie Porter in her Senate bid. The group spent $10 million on ads targeting Porter, a favorite among many liberals and a key critic of Bitcoin’s energy consumption. Porter later lost in the primary election.
Fairshake’s ads focused on issues more likely to resonate with voters, highlighting Porter’s acceptance of money from “banks, pharmaceutical companies, and oil giants,” rather than directly attacking her stance on crypto.
Porter said Fairshake did not engage in real dialogue with candidates and accused the group of trying to intimidate elected officials into accepting their agenda.
It remains unclear how much Fairshake’s efforts influenced the actual vote outcomes, but the crypto industry is becoming increasingly open about its desire to shape political campaigns.
Stand With Crypto, a nonprofit spun off from Coinbase, recently announced the formation of its affiliated PAC. It also grades various politicians—for example, giving the Biden administration, which has cracked down on cryptocurrencies, an “F.”
Meanwhile, presidential candidate Robert F. Kennedy Jr. received a better score after calling cryptocurrency “a bulwark against government and corporate expansion” at a conference last year—he earned an “A.”
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