Crypto firms are putting money into the 2024 elections: Public Citizen

As the 2024 US election approaches the house stretch, crypto firms are opening their wallets to attempt to influence the end result.

Almost half of all corporate money flowing into the election comes from the crypto industry. in line with a report this week by the nonprofit watchdog group Public Citizen. The sum, about $119 million, was raised by a mixture of donors, including Coinbase and Ripple accounted for greater than 80% of donations.

Most of the cash goes to super PACs supporting pro-crypto candidates running for office this yr. The industry has faced increased scrutiny throughout the Biden administration, and Coinbase and Ripple are two of the largest players embroiled in litigation with the Securities and Exchange Commission.

Donald Trump, the Republican candidate, has tried to take advantage of the divide between the crypto industry and Democrats by presenting himself as a crypto advocate and even delivering the keynote speech at a serious Bitcoin conference in Nashville, Tennessee last month. But money is flowing to each parties, with the House, Senate and presidency still up for grabs.

No other sector is maintaining with crypto. This also applies to grease firms and banks, which have been major political donors up to now.

Since 2010, when the Supreme Court ruling within the Citizens United case opened the door for unlimited corporate donations in U.S. elections, the crypto sector has accounted for 15% of all disclosed donations, in line with Public Citizen's report. More than 90% of crypto donations raised by firms have been made during this election cycle.

Rick Claypool, director of research at Public Citizen and creator of the recent report, said the big amounts of cash raised by crypto firms to “silence crypto critics and empower its supporters embodies everything that is wrong with the Supreme Court's disastrous decision in Citizens United.”

Claypool's research shows that because the 2010 ruling, crypto firms have been surpassed only by fossil fuel firms in total election-related spending.

Fairshake is the preferred of the pro-crypto, non-partisan super PACs. It is funded by a number of the industry's leading firms and has change into one among the highest-spending PACs this yr.

The majority of the group's funding got here from 4 sources. Coinbase contributed $49 million, enterprise capital firm Andreessen Horowitz donated $47 million, Ripple contributed $47 million, and Jump Crypto contributed $15 million. In total, Fairshake and its two affiliated PACs have raised about $169 million, with greater than 90 percent coming directly from firms.

Additional funds got here from various donors. For example, Coinbase CEO Brian Armstrong donated $1 million, while the Winklevoss twins contributed $5 million.

A submission to the Federal Election Commission revealed on Tuesday that Fairshake paid out nearly $75 million in July. Data compiled from FEC reports by OpenSecrets says Fairshake has nearly $120 million in money able to deploy with just 80 days to go before the November election.

The Super PAC has pledged $25 million from this pool to 18 candidates for the final election, to be split amongst nine Democrats and nine Republicans, with one other $18 million earmarked for 3 Senate races.

The industry's strategy paid off within the primaries.

Public Citizen's report found that of the 42 primaries that attracted money from crypto-funded super PACs, the candidate chosen by the crypto industry won 36. However, a lot of them don’t make their stance on crypto public.

“When Fairshake and its partners spend money to influence elections, whether by attacking crypto skeptics or supporting crypto supporters, crypto is not mentioned at all in the ads,” Claypool said.

In the New York and California congressional elections, cryptocurrency-funded campaign ads attacked the targeted candidates with traditional political barbs without mentioning cryptocurrencies.

“The only reason crypto is a hot topic this election cycle is because crypto companies are spending eye-watering amounts of money to make themselves impossible to ignore,” Claypool said.

The Democrats try to point out that they will find common ground with industry despite the tensions of recent years.

Senate Majority Leader Chuck Schumer, D-N.Y., kicked off a virtual town hall meeting called “Crypto4Harris” in August, saying on the event that a crypto bill could pass the Senate by the tip of the yr.

Vice President Kamala Harris' campaign team is actively working to develop a platform position on the crypto industry and reframe President Joe Biden's approach, several key Democrats told CNBC. On Tuesday, Harris' campaign team announced plans to take a pro-crypto innovation stance.

Coinbase Chief Policy Officer Faryar Shirzad praised the move, Write on X that he had “enjoyed participating in a series of discussions with the Harris team.” He described the approach as “constructive” and said “the dialogue was an important first step.”

Meanwhile, money from digital asset industry executives has flowed into Trump's campaign since he positioned himself as a pro-crypto candidate.

Trump has been making increasingly optimistic statements about cryptocurrencies throughout the campaign, and announced in late July that he had raised $25 million from crypto investors, although this figure has not been independently confirmed by CNBC.

Crypto industry executives appeared at Trump fundraisers in San Francisco and Nashville, where the Republican candidate told conference attendees that if he returns to the White House, he’ll make sure that the federal government never divests of its Bitcoin holdings.

“This afternoon, I'm laying out my plan to ensure that the United States becomes the crypto capital of the planet and the Bitcoin superpower of the world,” Trump said. “And we're going to get it done.”