Crypto giants are flexing their political muscles to limit regulatory oversight

The cryptocurrency industry has become a major force in US campaign finance, amassing a staggering $160 million war chest to support candidates favoring light regulation.

With the Senate majority potentially hanging on the reelection of cryptoskeptics like Sherrod Brown (D-OH) and Jon Tester (D-MT), the industry is expected to play a key role in the 2024 elections, according to a June 14 Bloomberg report.

Fairshake, the industry political action committee, has nearly doubled its funding in recent weeks with donations of $25 million each from Ripple Labs, Andreessen Horowitz and Coinbase. The Winklevoss twins, co-founders of Gemini Exchange, also contributed $4.9 million.

Coinbase CEO Brian Armstrong, whose net worth has grown to $10.8 billion, is calling on voters to remove lawmakers who don’t support digital assets. Earlier this week, so did Armstrong went to the Capitol meet with senators from both parties.

Over the last 48 hours, I met with more than a dozen Democratic and GOP senators in DC to discuss creating clear rules for the cryptocurrency industry and consumer protections for cryptocurrency users. Now that FIT21 has passed in the Senate, there is strong bipartisan momentum to get it done… pic.twitter.com/KWVylw1kDL

— Brian Armstrong (@brian_armstrong) June 12, 2024

The importance of lobbying for cryptocurrencies

Coinbase Chief Policy Officer Faryar Shirzad also emphasized the importance of political participation for the crypto space. He said:

As an industry, we have learned that to be heard, you have to show up in politics. (…) We really, really want to see it. We are very committed to this cycle and the years to come. This is just the beginning of a long road.

The crypto giants’ main goal is to reduce oversight by the Securities and Exchange Commission, as the regulator has sued major players and imposed hefty fines for alleged securities law violations. They prefer the CFTC as a regulator.

The industry rallied politically during the California Senate primary in March, spending $10 million on negative ads to help defeat progressive Republican Katie Porter.

This high-profile influence campaign marks a remarkable turnaround from the scandals and failures that rocked cryptocurrencies in 2022, including the FTX implosion. Its former CEO Sam Bankman-Fried was sentenced to 25 years in prison for crimes related to FTX’s management. The cryptocurrency market has since rebounded, boosted by the U.S. approval of Bitcoin cash ETFs.