Crypto PACs are spending big on US elections — What it means for the industry

The crypto industry is spending millions on the upcoming United States presidential election, and it appears the money is making a difference.

According to data collected by Open Secrets, the crypto-centric political action committee (PAC) Fairshake has accumulated over $202 million, making it a more successful fundraiser than anything else in the US political landscape.

Donald Trump’s keynote speech at the Bitcoin 2024 conference in Nashville, Tennessee, on July 27 is another indicator that the political classes are being won over. Trump, previously a crypto skeptic, appears to be fully onboard with the industry.

Erik LaPaglia, chief strategy officer at Propy, a blockchain-based real estate platform, was among those in attendance at Trump’s speech in Nashville. According to LaPaglia, the convergence between crypto and politics is increasingly clear.

“There was a litany of political figures and elected officials on both sides of the aisle, and obviously, that was highlighted by former President Trump’s keynote remarks on Saturday at the conference,” LaPaglia told Cointelegraph. “The contrast between the number of politically affiliated attendees in Nashville and at other conferences I have attended makes me think this issue is being picked up as a political football.”

Joey Garcia, director and head of public affairs, policy and regulation at Xapo Bank, also noted a tangible excitement in Nashville.

“Sat in the front row for Trump’s headline speech this afternoon, it felt like the atmosphere at Bitcoin Nashville had reached the fever pitch that we’ve seen in US politics in recent weeks. The crowd today relished the headline speaker’s reference to Bitcoin being the steel of our times and our industry being the Wright Brothers or Henry Ford of today,” said Garcia.

Xapo Bank, which styles itself as a Bitcoin-friendly bank, was the lead sponsor of the Bitcoin 2024 conference. Its former CEO Wences Casares is also a political donor, donating $250,000 to FairShake in September 2023.

More recently, Casares donated $1,000,000 to American Values 2024, the PAC supporting Robert F. Kennedy Jr., another crypto-friendly candidate.

FairShake and Protect Progress crypto PACs

Tracking political donations is challenging even when the details are a matter of public record. Each PAC may have a long list of contributors, many of whom donate under corporate names that aren’t instantly recognizable.

Furthermore, PACs may also donate to other PACs, further obfuscating matters. That’s not to say the processes involved are inherently underhand, but rather to point out that connecting all the dots doesn’t necessarily provide immediate clarity.

FairShake, the crypto super PAC, is a case in point.

Its top three donors are Coinbase ($46.5 million), Ripple Labs ($45 million) and crypto investment firm Andreessen Horowitz ($44 million).

While some of FairShake’s largest contributions were to Republican candidates, data from OpenSecrets shows it donated $13.5 million of its funds to Protect Progress, a liberal-aligned super PAC — effectively donating money to both sides of the aisle.

From July 19–24, Protect Progress made three donations to influence the outcome of the election for Washington’s sixth congressional district. The recipient of these donations was Democratic Party candidate Emily Randall, and the total value of the donations was $1.4 million.

This prompted Randall’s rival, Hilary Franz — who is also a Democrat — to post on X, “A Trump-donor-funded cryptocurrency Super PAC just bought $1.4 million in ads to support my opponent, Emily Randall.”

Discounting the $13.5 million FairShake donation, the top three donors to the Protect Progress PAC are Coinbase ($1.5 million), Ripple Labs ($1.5 million) and Andreessen Horowitz ($1.5 million).

Information from DoTheySupportIt indicates that both Franz and Randall have spoken positively about crypto in the past, but following the injection of crypto money into Randall’s campaign, Franz has discovered a newfound skepticism for the industry.

But since both candidates were crypto-enthusiast Democrats, why did Protect Progress prefer Randall to the tune of $1.4 million? It’s a question with no easy answers.

A chance for Democrats to lead on crypto policy

Under President Joe Biden, the Democratic party, whether fairly or otherwise, developed a reputation as less crypto-friendly than the Republican Party. With Biden dropping out of the race, the new presumptive Democratic nominee, Vice-President Kamala Harris, has the opportunity to reset the party’s stance.

PAC activity suggests the party’s stance is already being influenced.

Follow the Crypto, a site dedicated to tracking crypto PAC expenditures, shows that Democratic candidates have received more money than Republicans in this election cycle so far.

High-profile Democrats such as Senator Elizabeth Warren may be vocally anti-crypto, but crypto-positive Democrats such as Randall are finding themselves in receipt of significant sums, edging out less favorable Democrat picks.

Peter Moricz, partnerships lead of the Wrapped Bitcoin (WBTC) provider DLC.Link, suggests that Harris’s vice presidential pick could be important in her efforts to secure crypto PAC money.

“If Kamala Harris picks a crypto-friendly vice president, the balance could be tilted to a more positive side in terms of the promise for friendlier regulation,” Moricz told Cointelegraph. “For example, Andy Beshear, governor of Kentucky, relies on boom-and-bust industries like fossil fuels and is desperate to attract crypto miners.”

But whoever takes on the vice-presidential role, Harris has the opportunity to take a more crypto-positive stance.

Oliver Link, founder of crypto advisory firm OJL Advisory, told Cointelegraph, “The changing of the guard gives the Democrats the opportunity to reset and reframe their policies when it comes to cryptocurrency.

“The path to 1600 Pennsylvania Avenue may be digital and may be decided on emerging technologies such as cryptocurrency and blockchain.”

Do crypto and politics mix?

The crypto industry is just beginning to flex its political muscle, but it is already becoming one of the biggest political influencers in Washington.

Data from Statista shows that pharmaceuticals, electronics and insurance were the biggest lobbying groups in 2023. If the first half of 2024 is anything to go by, blockchain and cryptocurrency could very well break into the top three.

While some might celebrate that newfound influence and relevancy in Washington, industry figures recommend a cautious, nonpartisan approach.

As Garcia said, “Trump’s campaign has become a standard bearer for Bitcoin in recent months despite having previously harbored significant skepticism,” before adding:

“Our industry is nonpartisan at its heart, and more will be accomplished over the long term if it can remain so.”

LaPaglia offered similar sentiments.

“I actually believe that it’s probably better for the industry to try and stay rather neutral politically. The idea that this is a political issue on either side of the aisle is not great for the underlying technology,” he said.

Such is the polarization of US politics in 2024 that remaining neutral during this presidential election cycle will be no easy feat.

America goes to the polls in four months. Until then, crypto donors and the PACs they support can expect intense scrutiny.