Super Tuesday to test resurgent crypto industry
NEW YORK (Reuters) – Crypto is back! And it’s not just in the markets.
The burgeoning cryptocurrency industry is jumping into the 2024 US election, spending millions of dollars in Super Tuesday primary contests in California, Alabama, and Texas to boost crypto-friendly candidates and defeat those pushing for more regulation.
How these candidates perform on Tuesday, when dozens of races across America are whittled down to two contestants, will indicate how much influence the increasingly wealthy crypto executives may wield in November.
Brand-new industry super PACs (independent fundraising groups) Fairshake, Protect Progress, and Defend American Jobs, backed by funds from Coinbase and the Winklevoss twins, have spent at least $13 million in Tuesday’s primary races, according to a Reuters analysis of data from OpenSecrets, a research group that tracks money in US politics and its influence on elections and policy.
And that’s just the beginning, officials say.
“The crypto community is playing politics to win,” said Fairshake spokesman Josh Vlasto. “We will have influence and impact in races behind candidates who align with our agenda and our vision.”
In total, the three super PACs have raised nearly $102m. from January 2023 to January 2024, data from the Federal Election Commission showed.
The cryptocurrency industry has surged in recent months, and Bitcoin hit a new high last week, after the collapse of several big players in 2022 crushed prices and prompted a regulatory crackdown.
The industry, including its employees and political action committees, has so far contributed about $59.2m. toward the 2024 election cycle, up from $26.8m. in the 2022 midterm cycle and $1.6m. in the 2020 cycle, OpenSecrets data showed.
California progressive Democrat Katie Porter, who is running for the Senate, is a key target. Fairshake has spent more than $10m. to try to convince voters not to back Porter, including launching a statewide TV and digital media buy.
Porter joined US Senator Elizabeth Warren in 2022, seeking information from Texas’s electric grid operator on crypto-mining operations in the state and how the power the industry uses affects climate change and the energy grid.
“This shady super PAC is spending more than $10m. to kick Katie out of Washington because they know she will stand up for Californians and take on powerful special interests like them in the Senate,” Porter’s campaign representative said.
Protect Progress has also spent about $1.7m. to back Shomari Figures, a Democrat and former deputy chief of staff to US Attorney General Merrick Garland, who is running in Alabama’s 2nd Congressional District race. A Democrat is expected to win the hotly contested race, which was sparked after a federal court ordered Alabama to draw a new congressional map.
Figures, if elected, has pledged to “embrace the new landscape around digital assets, like Cryptocurrency, to stimulate innovation and technological advancement,” his website says.
In Texas, Protect Progress has put about $962,000 in support of Rep. Julie Johnson, a Democrat running in the state’s 32nd Congressional District race.
Meanwhile, Defend American Jobs has allocated more than $1m. to back Rep. John Bradford III and Rep. Tim Moore, both Republicans in North Carolina, OpenSecrets data showed. Moore is the speaker of the state’s House of Representatives.
Democrats are favored to take control of the US House of Representatives in the 2024 election, perhaps by a slim margin, meaning individual Congress members could play pivotal roles in passing legislation.
“You have candidates in all of those races who have demonstrated not only an openness to learning and thinking more about digital assets, but actually calling on Congress and on policy-makers to take action there,” said Kara Calvert, head of US policy at Coinbase.
Coinbase, an online platform for buying and selling crypto, is also behind a nonprofit group called the Stand With Crypto Alliance.
The industry’s interest in the 2024 election comes on the heels of one of the biggest financial frauds on record. FTX founder Sam Bankman-Fried was found guilty last year of stealing from customers. Prosecutors allege he used those funds to donate more than $100m. to US political campaigns.