Despite its origins as an economic force existing outside the political system, cryptocurrencies have long had a strange relationship with U.S. elections. Other than Brock Pierce, the Mighty Ducks child actor turned Tether founder who ran for president and Senate, or Bitcoiner Bruce Fenton, who won a respectable 4.47% of the vote in the Republican primary. There’s no need to look. 2022 New Hampshire State Senate Seat. However, despite adhering to transparency, cryptocurrencies’ most influential role in politics has been not the vanity candidacy of blockchain proponents, but the growing prevalence of dark money.
Perversion of American exceptionalism means corporations may not get the right to vote, but thanks to the Supreme Court’s 2020 Citizens United decision, corporations can obfuscate the identities of their donors Through the organization, they can now put as much money into the race as they want. Sam Bankman Fried took full advantage of this, funneling money to campaigns through super PACs that did not hide individual donations or backers, but later funneled tens of millions of dollars to Republican candidates through dark money channels. He admitted that he likely gave it. (Unfortunately, the Justice Department dropped campaign finance charges against Bankman Fried.)
With Bankman Fried out of the picture this election cycle, the rest of the industry has stepped up. A new report by consumer advocacy group Public Citizen details the scope of donations to the cryptocurrency sector, showing that digital asset-related super PACs have already committed more than $102 million toward the 2024 election. It has been found to be the third largest of all super PACs. Half comes from direct corporate spending, primarily from Coinbase and Ripple Labs.
It is no surprise that the cryptocurrency industry is starting to take off in earnest. In 2020 and even 2022, cryptocurrencies have yet to become a partisan issue, with lawmakers across the aisle weighing in on the sector, from the House Financial Services Committee to the Senate Agriculture Committee. It was working on a series of bills that would bring about regulation — Bankman Fried’s article The shower of cash reflected a bipartisan appetite. Losing momentum with the collapse of FTX just before the 2022 election, many Democrats are waking up to the threat to consumers posed by the ocelot industry, while Republicans are losing momentum to SEC Chairman Gary Gensler and his perceived leader Elizabeth. He was furious at Warren’s high-handed approach. (Massachusetts Democratic Party)
As the Public Citizen report details, most of the donations from crypto super PACs have gone to the House and Senate primaries, including the defeated “billionaire candidate” in March. It also includes an eye-popping $10 million for Democratic Sen. Katie Porter of California, who claimed that she was responsible for the onslaught. (A spokesperson for one of the crypto super PACs thanked her for her work.) Some of the donations are supporting Democratic candidates, including crypto darling Ritchie Torres of New York; So far, most of the donations have favored Republicans. While the outsized influence of super PACs is clear, Public Citizen reveals that countless dark funds likely play a role as well. According to OpenSecret, a campaign finance watchdog group, this election cycle is moving faster than ever when it comes to dark money.
The real question is whether donations to cryptocurrencies have an impact. “Money moves the needle,” Coinbase CEO and top donor Brian Armstrong said during a panel discussion last September. And he may be right, both in terms of getting the industry recognized by Washington power brokers and in influencing elections. According to Public Citizen, of his six completed primaries in which crypto super PACS intervened, only one crypto candidate lost. Another cryptocurrency candidate, Jim Banks (R-Ind.), won yesterday, and 10 more primaries are scheduled.
The biggest test will be the race for the Ohio Senate seat. There, blockchain opponent Sherrod Brown, chairman of the Senate Banking Committee, is running for re-election against Republican Bernie Moreno, an ardent crypto advocate. The latest polls in March showed Mr. Brown with a slight advantage, even though the race had only just begun in earnest. “I’m not saying they have a target on their back,” Coinbase’s head of U.S. policy said in an interview with Brown and cryptocurrency skeptic Jon Tester (D-Mont.). new york times. “What I’m saying is, I think we have a chance.”
leo schwartz
leo.schwartz@fortune.com
@leomschwartz
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