The cryptocurrency industry has accounted for about half of all corporate contributions to political action committees, according to consumer advocacy group, Public Citizen. The donations are being funneled into congressional candidates of both parties and the candidate for president who is deemed to be friendly to the cryptocurrency space.
There was a time when the upstart scruffy purveyors of cryptocurrencies were a mere stepchild of the financial community. Those days are gone as the crypto industry becomes a growing force in influencing election outcomes nationally.
In 2024, the crypto industry has accounted for about half of all corporate contributions to political action committees, according to consumer advocacy group, Public Citizen. The donations are being funneled into congressional candidates of both parties and the candidate for president who is deemed to be friendly to the cryptocurrency space.
That is a big leap from the historical practice of industries that side with one political party over another. Fairshake, the industry’s dominant PAC, endorses candidates on both sides of the aisle and cares little for issues outside its sphere.
While many corporations are studiously avoiding this year’s elections and keeping a low profile, blockchain companies have contributed 48 percent of the $250 million thus far in corporate donations on the federal level. And yet the crypto spending thus far has carefully avoided making crypto currencies an issue in the elections.
Instead, the spending has centered around rebuilding the sector’s image after the black eye Sam Bankman-Fried gave crypto after the fall of his firm FTX. And that may prove to be an uphill battle. A recent Federal Reserve survey found that only 7 percent of Americans owned or used cryptocurrencies and yet 59 percent of them polled in swing states held a negative view of the currency.
Securities and Exchange Commission Chair Gary Gensler, shown during a July 2023 meeting at the U.S. Treasury, was appointed by President Biden, and has often voiced his skepticism of crypto. Donald Trump has pledged to fire Gensler on Day 1 if he is elected to another term as president.
The industry’s goals are also a top priority of the spending. Unlike many industries that want less regulation from the government, the powers to be in crypto want the opposite. They want the passage of FIT21, a bill that establishes a framework that would switch the regulation of digital assets out from under Gary Gensler of the U.S. Securities and Exchange Commission to the Commodities Futures Trading Commissions.
Gensler, considered an enemy of the crypto community, was appointed by President Biden, and has often voiced his skepticism of crypto. One of the SEC’s biggest targets was Coinbase, the largest crypto exchange, and Ripple, the company behind a stablecoin called XRP. As such, it is no wonder both firms have been leading the charge in the cryptos’ battle with regulators.
The crypto industry PACs are singling out those politicians who are anti-crypto and are actively running ads against their candidacy without mentioning crypto. For example, in Ohio, they are supporting Republican Bernie Moreno for the Senate to defeat Sen. Sherrod Brown, the chairman of the Banking Committee who is a crypto critic.
The crypto industry PACs are targeting crypto critics like Sen. Sherrod Brown, D-Ohio, the head of the Senate Banking Committee, and are actively running ads against their candidacy without mentioning crypto.
The companies have made headway in their strategy. In July, Former President Donald Trump headlined a bitcoin conference in Nashville, where he endorsed cryptocurrencies and vowed to champion their cause. He said he wanted America to become the world’s bitcoin superpower and promised to fire Gensler on Day 1. A Trump PAC raised about $7.5 million in crypto donations since early June.
Trump followed up his endorsement in September by unveiling a new cryptocurrency business, World Liberty Financial, with his children. This week his token sale for this new project had a less-than-stellar opening. Multiple and lengthy outages plagued the release all day Tuesday.
However, true to their goals crypto donations are also finding their way into Democratic campaign war chests. Ripple co-founder Chris Larsen, for example, gave the Harris campaign $1.9 million. Others have contributed as well. It seems to be working. Recently, Vice President Kamala Harris announced she would back a crypto regulatory framework where investors would be protected.
Corporations are watching the crypto industries’ battle to influence federal elections closely. Critics say it is a brazen attempt to force politicians to adopt a sector’s chosen policies or say goodbye to their political chances. If it works, you can bet that others will begin to emulate similar strategies.