Regulation
Crypto giants flex political muscle to reduce regulatory oversight
The crypto industry has become a major force in funding US election campaigns, amassing a colossal war chest of $160 million to support candidates favoring light regulation.
According to a Bloomberg report of June 14With the Senate majority potentially dependent on the re-election of crypto skeptics like Sherrod Brown (D-OH) and Jon Tester (D-MT), the industry is poised to play a central role in the 2024 elections.
Fairshake, the industry’s political action committee, has nearly doubled its funding in recent weeks thanks to $25 million in donations each of Ripple Labs, Andreessen Horowitz and Coinbase. The Winklevoss twins, co-founders of Gemini Exchange, contributed $4.9 million.
Coinbase CEO Brian Armstrong, whose net worth has soared to $10.8 billion, is urging voters to oust lawmakers who don’t support digital assets. Earlier this week, Armstrong also I went to the Capitol meet senators from both parties.
I met with more than a dozen Democratic and Republican senators in Washington over the past 48 hours to discuss creating clear rules for the crypto industry and consumer protections for crypto users. There is strong bipartisan momentum to get this done in the Senate now that FIT21 has passed the… pic.twitter.com/KWVylw1kDL
–Brian Armstrong (@brian_armstrong) June 12, 2024
The importance of lobbying for crypto
Faryar Shirzad, chief policy officer at Coinbase, also highlighted the importance of political participation for the crypto space. He said:
We have learned, as an industry, that you have to show up politically to be heard. […] However, we are very, very determined to achieve this. We are very committed to this cycle and beyond. This is just the beginning of a long road.
The crypto giants’ main goal is to reduce oversight from the Securities and Exchange Commission, as the regulator has taken major players to court and imposed hefty fines for alleged securities law violations. They prefer the CFTC as regulator.
The industry flexed its political muscle during California’s Senate primaries in March, spending $10 million on negative ads to help defeat progressive Rep. Katie Porter.
The high-profile influence campaign marks a remarkable turnaround from the scandals and failures that rocked crypto in 2022, including the FTX implosion. Its former CEO Sam Bankman-Fried was sentenced to 25 years in prison for offenses related to the management of FTX. The crypto market has since rebounded, supported by the US approval of spot Bitcoin ETFs.