Crypto’s Political Money Cannon Still Has Millions to Deploy

10/23/2024 19:44

(Bloomberg) -- Fairshake, a political action committee representing cryptocurrency interests, is poised to spend more than $40 million in the final weeks of the 2024 US elections, after already deploying $140 million on dozens of Congressional races nationwide.Most Read from BloombergClimate Change Is Killing Buildings in Slow MotionHow Kyiv Became a Leader in Digital Services Amid Wartime StrainTransportation Policy Gets Left Behind in Presidential RaceDhaka's Revolutionary Makeover Pits Vision

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Funded by Coinbase Global Inc., Ripple Labs, Andreessen Horowitz and other industry heavyweights, Fairshake’s efforts have rattled some candidates — perhaps none more than Sherrod Brown, Ohio’s incumbent Democratic senator and banking committee chair. The latest Federal Election Committee filings show that a Fairshake-funded PAC has funneled some $40 million since August to support Republican challenger Bernie Moreno, who has since erased Brown’s six-point lead and made the race too close to call.

Yet outside of the Ohio race, Fairshake has emerged as a rare bipartisan force, aiming to push candidates in both parties to take crypto seriously. It funds two affiliated PACs: Defend American Jobs, which supports Republicans, and Protect Progress, which backs Democrats.

In some cases, just the threat of its money has been enough. Crypto PACs have stayed out of Nevada’s senate race, but both candidates have added pro-crypto language to their issue pages. Whether a bid for industry funding or an attempt to avoid becoming a target, Fairshake’s backers view such a move as a success, according to a person familiar with the PAC’s operations, who requested anonymity to discuss its strategies and priorities.

The bipartisan spending isn’t universally popular. Silicon Valley venture capitalist and Fairshake donor Ron Conway railed at Coinbase CEO Brian Armstrong, venture capitalist Marc Andreessen and other industry executives after learning the PAC would back Moreno.

“How short sighted and stupid can you possibly be,” he wrote in an email, which was reviewed by Bloomberg. “Everyone knows Sherrod is must win state yet u engage in this disingenuous act.”

Conway, who said he would stop giving to the PAC, declined to comment.

Attack Ads

Fairshake’s ads almost never mention crypto, blockchain or the technology industry. Instead, they focus on the candidates — for example, touting Moreno’s family and his Donald Trump-aligned views on energy.

It took its first shot in February, spending $10 million to attack the integrity of Katie Porter, an early challenger for California’s empty Senate seat who has voted against pro-crypto bills. When she lost to Representative Adam Schiff in the primary, the crypto industry saw it as a validation of its strategy to spend to destabilize its enemies as much as to support its friends.

Fairshake also took partial credit for the primary defeats of New York Representative Jamaal Bowman and Missouri Representative Cori Bush, both of whom voted against industry-backed legislation that would have limited Securities and Exchange Commission oversight of cryptocurrencies. The PAC deployed $2 million against Bowman and $1.4 million against Bush.

In the Utah Republican primary, it spent $3.4 million to support John Curtis and defeat Trent Staggs. Curtis is now favored to win the Utah’s Senate seat in November.

“It is concerning to me the outsized influence money plays in politics generally, and what we witnessed here in Utah with this election,” Staggs said on X at the time. “We were outspent by well over $10 million, with an additional $2 million spent attacking me directly.”

In the run-up to November, though, Brown more than any other candidate ended up on the wrong side of Fairshake. As Senate Banking Committee chair, he’s been a critic of the industry, bashing its Super Bowl ads and questioning its legitimacy. Moreno, meanwhile, started a blockchain-based company to digitize car titles, after building a national chain of car dealerships.

“Before our investment, one of the leading anti-crypto Senators was on a path to victory,” said Josh Vlasto, a spokesperson for Defend American Jobs. “Now a pro-crypto leader is in a position to win.”

In Michigan, Fairshake’s Democratic affiliate, Protect Progress, has spent over $10 million to support Elissa Slotkin’s run for Senate. She introduced and voted for pro-crypto legislation in her time on the House Agriculture Committee. It’s spent another $10 million in Arizona on behalf of Ruben Gallego, who is running against Kari Lake.

It has also spent almost $2.5 million to support Shomari Figures, a Democratic candidate for Congress from Mobile, Alabama. He’s made crypto part of his platform since the primary and encouraged the Democratic National Committee to “take a forward-looking approach to digital assets and blockchain technology.” Figures is currently leading in the polls ahead of the general election.

By backing Democrats and Republicans, the crypto industry has defied a more traditional corporate political playbook, said Rick Claypool, a research director for Public Citizen, a nonprofit consumer advocacy organization. Since the Supreme Court in 2010 lifted most election-spending restrictions, companies have largely focused on pre-existing PACs or concentrated donations on candidates from one party.

“It’s purely transactional and on specific policies,” Claypool said. “It is a very clear attempt to apply pressure on the lawmakers themselves to essentially say: ‘Support us and we’ll stay out of your race.’”

Fairshake still has tens of millions left in its coffers, in part thanks to backers like blockchain software company ConsenSys, which added $800,000 in September, its latest filing shows. And its supporters could still add more.

Earlier this month, Fairshake turned its attention to a series of close House races. True to form, it threw its support behind a Republican, Michelle Steel of California, and a Democrat, Colorado’s Yadira Caraveo.