After the spectacular fall of FTX CEO Sam Bankman-Fried, you might have expected the embattled cryptocurrency sector, and its sophisticated lobbying operations, to have ground to a halt. But if anything, both are back with a vengeance—and the regulatory post-SBF crackdown that followed has spurred the sector to potentially become a major political force in 2024.
A new, unholy alliance has emerged on Capitol Hill, and it’s hoping not just to recraft governmental policy around digital funny money but to push its antiregulatory agenda across a whole host of elections. To do so, the crypto industry is teaming up with the people behind the latest megahyped, bubblicious tech trend: the artificial intelligence boom.
You may already have noticed crypto and tech money swishing around in the 2024 primaries. For the open California Senate seat, crypto-backed super PAC Fairshake splurged $10 million on ads against candidate Katie Porter, whose progressivism and crypto skepticism made her an enemy of the industry. She, of course, would lose. An affiliated PAC, Defend American Jobs, likewise dove into North Carolina’s GOP primaries, throwing half a million to the winning candidate for the 14th Congressional District. That PAC also contributed $3 million on behalf of West Virginia Gov. Jim Justice, who’s far and away the front-runner in his Senate primary and will inevitably succeed Sen. Joe Manchin come 2025.
Another Fairshake affiliate, Protect Progress, has put millions behind candidates who have explicitly expressed their support for the crypto industry. The group blew nearly $2 million to boost Shomari Figures in the Democratic primary for Alabama’s 2nd Congressional District; he ended up winning the April 16 runoff by 22 points. Protect Progress also spent nearly $1 million in support of Julie Johnson, who crushed her opponents in the Dem primary for Texas’ 32nd Congressional District. The competitive primaries of crypto-supporting Democratic Maryland Senate candidates David Trone and Angela Ashbrook have seen a large influx of money from obscurely named crypto PACs like Defend American Jobs.
It’s in not just the electoral sphere but also the messaging being sent directly to current officials. According to CNBC, a dark-money nonprofit called the Cedar Innovation Foundation “is being heavily funded by crypto industry players” and running ads encouraging crypto enthusiasts to request that Ohio Sen. Sherrod Brown loudly oppose Securities and Exchange Commission Chair Gary Gensler; both are considered villains in the crypto world, along with Sens. Elizabeth Warren and Roger Marshall, who’ve likewise been the target of Cedar Innovation ads thanks to their co-sponsorship of the hated Digital Asset Anti–Money Laundering Act. Warren has also been courted by individual blockchain workers hoping to dissuade her from that legislation, and received a letter co-signed by figures from big firms—Coinbase, Andreessen Horowitz, the Blockchain Association—asking the same. A Fairshake spokesperson told Bloomberg that crypto donors will likely be homing in next on the primaries in important states like Michigan and Montana.
To see how we got here, despite all of crypto’s recent travails, it’s worth looking back to the first significant surge in crypto lobbying that occurred throughout 2021, when all aspects of the industry (Bitcoin, alternative currencies, NFTs, the blockchain) gained mainstream exposure, political acceptance, and frenzied valuations as a result of lockdown-fueled interest in virtual economics and get-rich-quick schemes. The then-nascent Biden administration had already turned its attention to crypto regulation, with the SEC lodging its securities charges against Ripple in February of that year—while also approving crypto exchange Coinbase’s request to go public. One of that company’s biggest investors, famed venture capital firm…
Read More:The Crypto Bros Are Back—and They Have a Dangerous Political Goal