US elections: Crypto companies set new funding record

by cryptheory

August 26, 2024

Reading Time: 4 mins read

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Crypto companies are making significant investments in the U.S. federal election cycle. So far, they have contributed nearly half of all direct corporate spending in the US elections.

This information comes from a recent report by Public Citizen. According to this consumer rights advocacy group, the crypto industry has contributed $119 million out of the total $248 million that companies have spent so far.

The sector is increasingly seeking to influence laws and regulations that favor its growth. Therefore, they support candidates who are pro-crypto. The companies’ goal is to push for more flexible rules or clear guidelines for the sector, as this can help reduce uncertainties regarding cryptocurrency regulation.

NEW: Crypto corporations are dominating political spending, pouring over $119,000,000 into influencing federal elections in 2024 alone.

That's almost HALF of all corporate money spent this election cycle. https://t.co/79K2UOiEGL

— Public Citizen (@Public_Citizen) August 21, 2024

Coinbase and Ripple donated $107.9 million to a fund

Most of the sector’s resources went to Fairshake PAC, a fund focused on financing candidates who favor cryptocurrency interests. This year, Fairshake PAC has already raised $202.9 million, with more than $107.9 million coming from major cryptocurrency companies like Coinbase and Ripple.

Additionally, the remaining funds mainly come from billionaire executives in the crypto world and venture capital investors. For example, contributions include $44 million from Andreessen Horowitz founders, $5 million from the Winklevoss twins, and $1 million from Coinbase CEO Brian Armstrong.

However, companies like Coinbase and Ripple provided more than half of Fairshake’s financial support. The $107.9 million from these two companies represents 53% of the total.

According to Public Citizen, corporate spending in these elections has reached an unprecedented magnitude.

Fossil fuel giants continue to dominate U.S. political donations

Furthermore, the report shows that in the last three election cycles, cryptocurrency companies’ donations have accounted for 15% of all corporate contributions.

This percentage applies to the total donations since the 2010 U.S. Supreme Court decision that allowed unlimited contributions to so-called “super PACs.” These entities are not supposed to have direct coordination with candidates’ campaigns.

In terms of election spending, cryptocurrency companies are second only to fossil fuel giants. Over the past 14 years, companies in this sector have invested $176 million.

For example, Koch Industries stands out for having contributed $73 million. Much of this money went to Americans for Prosperity, an organization that strongly supported Tea Party Republicans during Barack Obama’s presidency.

The study only examines donations from companies to super PACs and hybrid PACs, as these organizations are required to report their contributions to the Federal Election Commission.

Trump is the favorite of the crypto world

The Republican Party’s candidate for the U.S. presidency, Donald Trump, is the favorite among entrepreneurs and users in the crypto world in this year’s election. Recently, he has made efforts to appeal to this audience.

In July, Trump attended the Bitcoin Conference in Nashville, Tennessee, shortly after surviving an alleged assassination attempt during a rally in Pennsylvania. This drew attention as a gesture of reverence to the sector.

Earlier, in June, the former president excited cryptocurrency users by declaring that he would end Biden’s “war on crypto” if elected president. This came after he said that the U.S. should strive to lead the cryptocurrency industry.

This has been seen as a significant shift in Trump’s stance. Previously, he had declared Bitcoin a “fraud.” However, he now signals a more favorable position, which could impact federal-level regulation of the sector.

Additionally, Trump recently revealed cryptocurrency investments that could reach $5 million. He also earned more than $7 million from his venture into non-fungible tokens (NFTs).

This information became public with financial disclosures for the 2024 election. According to Citizens for Ethics, Trump stated that he holds Ether valued between $1 million and $5 million.

Expert says Trump’s promises are impossible to fulfill

Despite the sector’s optimism, it remains uncertain what impact a potential Trump victory would have on cryptocurrency regulation in the U.S.

According to Professor Tonya Evans, an expert in digital assets, some of the promises made by Donald Trump during the campaign are literally impossible to fulfill if he is elected.

For example, the Republican candidate committed to firing Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), on his first day in office. However, such a process would be difficult and could take months or even years to complete.

Evans also downplays the fact that Kamala Harris, the Democratic candidate for the U.S. presidency, has not yet taken a clear position on cryptocurrency. The professor considers the issue complex, requiring a thorough analysis of the impact of potential regulatory changes.

“Donald Trump’s recent pro-crypto stance took about three and a half years to develop after years of open criticism (and severe taxation). It is, therefore, curious that some voters now demand an immediate shift from Harris as she transitions from U.S. Vice President to presidential candidate. New political stances, especially on complex issues like the cryptocurrency sector, require careful deliberation and time—something Trump had, and Harris also deserves.”