Crypto emerges as a funding powerhouse in the election
The cryptocurrency industry has been fairly quiet recently, with the scandals around the bankruptcy of crypto exchange FTX and its former chief executive, Sam Bankman-Fried, fading from the headlines.
But behind the scenes, the industry has become a bit of a power player in the 2024 elections — funding political ads, endorsing House and Senate candidates and raising millions of dollars, according to a recent report from the nonprofit group Public Citizen.
Marketplace’s Meghan McCarty Carino spoke to Axios reporter Brady Dale, author of the Axios Crypto newsletter, to learn more. The following is an edited transcript of their conversation.
Brady Dale: The crypto industry has decided to make this the year that, as a group, they really invest heavily in making their power clear to political leaders so they can get the kind of laws they want. They’ve already been active in a few primaries. They’ve had several wins there. Most notably, I think, they were able to keep [Democratic U.S. Rep.] Katie Porter from getting through the [Senate] primary in California, which was a big goal. There’s been a few other successes like that, that are a little more confusing than other ones, because some other factors have been in play. But yeah, they just really want to see legislation happen in the next Congress, and they’re flexing their financial muscle right now in order to convince legislators to come to the table with them next year.
Meghan McCarty Carino: Yeah, tell me more about that financial flex. What does that look like?
Dale: Public Citizen estimates that there’s, like, $119 million of corporate money that’s come into this overall election. You know, that’s all elections together, not just, well, they’re not really in the presidential very much, but all the elections together. It actually might be like a little bit more than that, it sort of depends on how you define different kinds of categories. But it’s a lot of money. One organization in particular, which is kind of leading the charge, this PAC or group of PACs really, called Fairshake has $169 million of assets available. And, you know, by some estimates that’s something like, altogether that’s something like roughly half of all of the money that’s come from corporate America into this election. So it’s a gigantic amount of cash. They’re really trying to get noticed.
McCarty Carino: That is such an incredible statistic. And I’m looking at, you know, a graph from your reporting — 2024, it’s like almost half from basically a blip in previous elections, right?
Dale: Yeah. I mean, there’s all the Sam Bankman-Fried investing in the last cycle, which drew a lot of scrutiny. He put a lot of money in. Some other people invested some as well, but it’s way more this time, and it’s way more strategic, and it’s way more unified this time than we’ve ever seen it before.
McCarty Carino: Is there any clear kind of partisan delineation in who crypto money is flowing to?
Dale: I would have said until this year that really cryptocurrency has very much become a Republican issue, but the industry is not accepting that, and so, for example, Fairshake has gone out of its way to endorse as many legislative candidates on both sides of the aisle. So it’s basically equal numbers there. They might spend slightly differently based on priorities, but they still have endorsed on both sides. While normally we do see industries tend to align with one side or the other, thus far this money is not clearly going to one side or the other. On the other hand, I will say rank-and-file crypto people — this isn’t wholly true, but by and large — are kind of like tending Republican in this cycle. They feel like the party has shown more interest in them, and they also are so angry about how much the Biden administration has undermined the industry that they’re just erring on the side of Republicans. But the money, the money is going to both sides.
McCarty Carino: So Fairshake is the crypto industry’s kind of dominant political action committee. But who, like, which companies are kind of making big-dollar donations to this PAC?
Dale: Yeah. So, I mean, I think the lion’s share of the money has really come from Coinbase and from Ripple. It’s like a cryptocurrency organization that sort of attempts to interbank stuff, and then Andreessen Horowitz, the big venture-capital firm, has also put a ton into it. So those are kind of the big three.
McCarty Carino: And what does the crypto industry want politically?
Dale: What they want is legislation that allows them to exist and have a clear path to function in the United States. With the current trajectory of sort of what the Securities and Exchange Commission is doing with regard to cryptocurrency, it’s an existential threat to the existence of the industry in the country. So they want Congress to pass some kind of law that says, here’s how these assets can function in the world and can be legal and can be in compliance. And they want that as soon as possible.
McCarty Carino: To what extent does it seem like crypto has come to the forefront this election cycle in terms of, you know, policy issues?
Dale: I mean, really, the only thing that’s happened that really brings it to the forefront, that brings it onto the campaign trail, has been former President [Donald] Trump’s embrace of cryptocurrency and particularly bitcoin. You know, he’s made statements about it. He showed up at Bitcoin 2024 in Nashville. I was in the room when he did that, and he’s talked about it a variety of ways. Other than that, you know, I haven’t seen much evidence of crypto really showing up as a topic on the campaign trail. I’m always looking for signs of it. The [Vice President Kamala] Harris campaign has said close enough to nothing that you might as well call it nothing. I mean, one very sort of arcane statement by a staffer at an interview during the [Democratic National Convention] is kind of as much as they said, and really they didn’t say much of anything. So it’s really the money that’s in play, that’s a factor. But even in the ads that get put out by the crypto industry to sort of like support candidates who they’re for or against, they don’t really talk about cryptocurrency. They just try to either advance a candidate if they like them or undermine a candidate if they don’t like them, but they don’t bring up blockchain as an issue.
McCarty Carino: Yeah. I mean, you say this is mostly kind of a financial issue, but is there, like, a crypto voting constituency?
Dale: Oh, there’s definitely people out there who are voting on cryptocurrency as an issue for sure. I am highly skeptical that it’s that many people.
McCarty Carino: Not that many single-issue crypto voters?
Dale: Yeah. I mean, I think there’s a bunch, and there’ll probably be more. I doubt there’s enough in the world at this point to sway many elections. That said, it is a decent number of people who own cryptocurrency in the country now. In a presidential race as tight as the one between Trump and Harris, you know, even a pretty small number could make a difference in a couple of states. So I don’t totally discount it. But for example, the industry likes to trot out this number that, like, 52 million Americans own crypto, which is like, OK, fine. But how many of those people — and we don’t really know, but it’s a pretty modest amount — how many of them have like, $100 worth of bitcoin or something like that? That’s not gonna be their whole voting background. Maybe they care about it, maybe they like it, but they probably care about some other issues too.
Politico is also reporting that political divisions are emerging in the largely unified crypto industry because activists are backing candidates from both major parties.
One Democratic Party megadonor, Ron Conway, recently left the Fairshake crypto super PAC after it said it would support the Republican challenge to Democratic U.S. Sen. Sherrod Brown of Ohio.
GOP lawmakers also reportedly “expressed frustration” when Fairshake threw its support behind two Democrats running for Senate — Reps. Elissa Slotkin in Michigan and Ruben Gallego of Arizona.
One congressional aide quoted by Politico said, “Democrats are mad, Republicans are mad, everyone’s mad.”
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