Dec 18, 2023 - Politics & Policy

Scoop: Crypto leaders build colossal $78 million war chest for 2024

Illustration of pixelated coins inside of a treasure chest.

Illustration: Maura Losch/Axios

Cryptocurrency industry leaders have poured $78 million into super PACs aimed at bolstering and growing the ranks of crypto-friendly lawmakers on Capitol Hill, Axios has learned.

Why it matters: The immense figure — raised in just three months with nearly a year to go before election day — puts crypto on track to rival far more established industries in terms of political giving.

  • Crypto-focused super PAC Fairshake, along with affiliated PACs Protect Progress and Defend American Jobs, will report $78 million raised in the final three months of 2023, the groups say.
  • The money comes from a coalition of crypto companies, executives and investors, including Coinbase, Andreessen Horowitz and the Winklevoss twins.
  • The sum also represents a collective effort to detoxify crypto's image in the campaign fundraising world after the fall of FTX founder and prolific political donor Sam Bankman-Fried.

Driving the news: Donations will go to congressional candidates in both parties who are "pro-innovate, pro-responsible regulation, pro-crypto, pro-blockchain technology," an operative involved in the matter told Axios.

  • "It's not anti-regulation, it's pro-responsible regulation to foster the industry in the United States," they added.
  • House Financial Services Committee Chair Patrick McHenry (R-N.C.) and Majority Whip Tom Emmer (R-Minn.) are among those who have received support from Fairshake so far, according to ProPublica.
  • Other incumbents with the PAC's backing are Reps. Don Davis (D-N.C.), Ritchie Torres (D-N.Y.), Young Kim (R-Calif.), Josh Gottheimer (D-N.J.), Zach Nunn (R-Iowa), Greg Meeks (D-N.Y.) and Steven Horsford (D-Nev.).

Zoom in: The investment comes as lawmakers have become more serious about establishing clear regulations for the crypto industry.

  • In July, the House Financial Services Committee advanced multiple crypto regulatory bills to the floor for the first time, Axios' Crystal Kim reported.
  • "In order for the blockchain economy to realize its full potential, a clear regulatory and legal framework for success is needed," Fairshake's release said.
  • "The crypto community continues to advance initiatives to promote stability, tech innovation, and growth of the blockchain economy in the U.S., positioning it as a hub for blockchain technology development and adoption."

Zoom out: Cryptocurrency "has become a partisan issue," according to Axios Crypto author Brady Dale, pointing to Biden administration aversion and Republican warmth towards the crypto industry.

  • Securities and Exchange Commission (SEC) Chair Gary Gensler's efforts to regulate crypto, seen as hostile by many in the industry, have "created a $100 million dollar headache for some congressional Democrats," said a source close to Fairshake.
  • The group "will make sure these Democratic candidates now get to choose between being for something more than 50 million Americans own or for Gary," the source said.

The bottom line: "If you look at like the oil and gas lobby or the banking lobby — I mean they're spending, I don't know, in the order of $100 million a year," Coinbase CEO Brian Armstrong, a leading backer of the PAC, told Axios in September.

  • "Money moves the needle," he said. "For better or worse, that's how our system works."
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