"New money" is fierce, with crypto newcomers donating over $200 million to the U.S. elections

Author: flowie, ChainCatcher

Editor: Marco, ChainCatcher

The new tech elites are expressing their interests by providing campaign funding to pro-cryptocurrency candidates, which is also influencing the attitudes of American politicians towards crypto assets.

Following a series of "friendly" initiatives towards crypto by Trump and Biden, another U.S. presidential candidate, Robert F. Kennedy Jr., has also endorsed crypto technology, stating that "cryptocurrency is a symbol of freedom and transparency," and purchased 21 bitcoins during his campaign to show support for using cryptocurrency as a medium of exchange.

In addition to the growing number of young crypto voters, the weight of crypto influence is also affected by the proactive "cash power" of the crypto industry and the significant role of crypto think tanks.

Last week, after Ripple announced a $25 million donation to the cryptocurrency super PAC Fairshake, a16z also announced a $25 million donation to Fairshake.

Behind the U.S. Election, Record High Crypto "Cash Power"

During the 2022 midterm elections, Sam Bankman-Fried, the founder of FTX, one of the largest crypto exchanges in the U.S. (now convicted of serious crimes), became a core force influencing the U.S. political landscape with tens of millions of dollars in political donations.

After Sam Bankman-Fried was imprisoned, in the 2024 U.S. presidential election, crypto companies like Coinbase and Ripple, along with crypto-friendly venture capital firms like a16z, have taken over from FTX and SBF, attempting to gain a voice for the crypto industry through "cash power."

The crypto PAC Fairshake, continuously funded by Ripple, a16z, and Coinbase, has become a major political influence tool for the cryptocurrency industry in 2024.

Before Ripple and a16z announced a cumulative investment of $50 million in Fairshake, a report released by consumer rights organization Public Citizen on May 6 stated that Fairshake and its two affiliated PACs (Defend American Jobs and Protect Progress) had raised over $102 million for the 2024 election, ranking third among all PACs at that time.

According to earlier reports from Bloomberg, the crypto industry contributed only $83 million in donations for the 2020 U.S. election. Although there are still months until the 2024 U.S. presidential election, the political donation amount from the crypto industry has already far exceeded the previous election cycle.

Of the over $100 million raised by Fairshake, Ripple contributed approximately $50 million.

With a16z announcing a $25 million donation to Fairshake, its total donations are expected to reach $47 million, while Coinbase donated $23.5 million. Additionally, Jump Crypto donated $5 million, and Circle and Kraken each contributed $1 million.

Several well-known figures in the crypto industry also participated in the donations.

Cameron and Tyler Winklevoss, the billionaire twins behind Winklevoss Capital Management, donated a total of $5 million.

Phil Potter, an executive at Tether and Bitfinex, donated nearly $2 million, and Coinbase CEO Brian Armstrong personally donated $1 million.

Furthermore, Electric Capital executive Avichal Garg, Multicoin Capital's Tushar Jain and Kyle Samani, and Paradigm's Matt Huang donated varying amounts in the hundreds of thousands.

The more aggressive political donations from the crypto industry are also a survival battle for crypto companies facing increasingly harsh policies from U.S. regulators.

The main force behind crypto donations in the 2024 U.S. election is also the group most affected by U.S. regulation, with Ripple, Coinbase, and Kraken having been accused of violating securities laws.

While Kraken chose to settle by accepting a $30 million fine, Ripple and Coinbase are still fighting against U.S. regulators.

Recently, Ripple submitted an objection to the SEC's motion to impose a $2 billion fine, requesting the court to impose a fine of no more than $10 million. The lawsuit against Coinbase by the SEC for alleged violations of securities laws is still ongoing.

In contrast to obtaining funds through wealthy crypto companies and investment institutions, Coinbase's initiated crypto lobbying organization Stand With Crypto will also launch a PAC for the U.S. election, raising funds from its 440,000 members to support pro-crypto politicians.

Currently, the Stand With Crypto website shows that nearly 900,000 crypto users have provided over $87 million, with the largest single donation coming from Moopay's recent $1 million contribution.

According to data from the nonprofit organization OpenSecrets, which tracks U.S. political funding, several supporters from the crypto industry are among the largest political donors in the U.S.

The largest donor is Jeffrey Yass, co-founder of trading giant Susquehanna International Group (SIG), who donated over $70 million between 2023 and 2024.

In early July 2022, Jeffrey Yass donated 100 bitcoins (BTC) to the crypto political organization "Crypto Freedom PAC," valued at over $1.9 million at the time, setting a record for the largest political donation in bitcoin recorded by the Federal Election Commission. Joe Kildea, a representative of Crypto Freedom PAC, stated that Yass's crypto donation might be due to the PAC's support for candidates opposing the Biden administration's regulation of cryptocurrencies.

Additionally, a16z founder Marc Andreessen has also donated over $11 million to this year's U.S. presidential election.

More crypto donations are expected to emerge. Bitcoin Magazine CEO David Bailey recently announced that his team will raise $100 million to launch a campaign to "ensure the next U.S. president supports bitcoin."

Over 80% Win Rate, Initial Impact of Crypto "Cash Power"

According to the report from Public Citizen, in the six primary elections that the wealthiest crypto PAC Fairshake and its affiliated PACs intervened in and have now concluded, only one crypto-supported candidate failed, resulting in a win rate of over 80%.

Among them, Fairshake spent $10 million on advertising to oppose Katie Porter's campaign for California senator, ultimately leading to her defeat.

In the coming months, 11 other candidates supported by Fairshake and its affiliated PACs will participate in the party primaries, with some candidates already receiving over $3 million in support.

Fairshake has also pledged to invest funds in Senate campaigns in battleground states like Ohio and Montana, which is considered crucial for securing a majority in the Senate.

Coinbase's initiated crypto lobbying organization "Stand With Crypto" is also using part of its fundraising to host crypto events, allowing closer interaction with candidates for the 2024 U.S. presidential election to promote pro-crypto ideas.

In December 2023, Republican candidates Asa Hutchinson and Vivek Ramaswamy, along with Democrat Dean Phillips, engaged in discussions about the crypto industry at a "Stand With Crypto" event and interacted with crypto media CoinDesk.

The Stand With Crypto website previously indicated that invited candidates also include Trump, independent candidate Robert F. Kennedy Jr., and Republicans Doug Burgum, Nikki Haley, Ron DeSantis, and Chris Christie.

An Unignorable Crypto "Think Tank"

In addition to exercising "cash power," some crypto organizations or individuals are also acting as important think tanks for key candidates, influencing U.S. elections and future crypto policy directions.

Recently, Trump has changed his previous stance on crypto and is actively promoting it. For example, he has made statements like "ensuring the future of cryptocurrency and bitcoin happens in the U.S.," supporting crypto donations, and pardoning the Silk Road founder.

Trump's series of crypto initiatives have garnered him significant support, aided by the professional crypto advice provided by David Bailey's team at Bitcoin Magazine.

David Bailey revealed that his team has been advising Trump's campaign to formulate a pro-bitcoin and cryptocurrency policy.

Bailey also mentioned an executive order submitted to Trump, which would be signed on the first day of his potential return to power, focusing on cryptocurrency issues, although no further details were provided.

In response to Trump's crypto push, Biden's campaign team is also actively seeking crypto think tanks. According to The Block, Biden's campaign team has recently begun reaching out to some crypto industry experts, including those previously rejected by Biden, to seek guidance on his crypto policy.

Conclusion

The SEC's 180-degree turn on Ethereum ETFs, along with the unusual support for crypto from candidates like Trump and Biden, indicates that crypto has unprecedentedly become an important factor in the U.S. elections.

As the crypto super PACs grow, crypto companies fight to change the unfavorable regulatory environment, and some crypto professional teams enter competitive teams to provide advice, the influence of crypto on the U.S. elections is expected to continue to expand.