The cryptocurrency industry is facing internal turmoil over how to best allocate its financial resources for the upcoming 2024 U.S. elections, as spending reaches record levels. The sector, which has poured more than $119 million into political races this election cycle, is second only to the fossil fuel industry in corporate political contributions, according to a report from consumer advocacy group Public Citizen. Yet, disagreements have emerged regarding the direction of these contributions and how they align with the industry’s long-term goals.
Last month, the Defend American Jobs PAC, a political action committee (PAC) linked to FairShake PAC, revealed its plan to spend at least $12 million in support of Republican candidate Bernie Moreno, who is running against Democratic Senator Sherrod Brown in Ohio. This decision sparked controversy, leading Democratic donor Ron Conway to cut ties with the PAC. Conway, who had contributed $500,000 to FairShake, voiced concerns in an email to fellow donors, expressing that targeting Brown could undermine efforts by Senate Majority Leader Chuck Schumer to pass pro-cryptocurrency legislation by year-end.
“This is a very personal decision for people, and it often can be very emotional,” said Blockchain Association CEO Kristin Smith in an interview with the Washington Examiner. “There are some people who are crypto-only voters, but there are some people that aren’t.”
The rift has led to tensions, not only within the cryptocurrency community but also on Capitol Hill. Frustration arose among Republicans after FairShake endorsed two Democratic Senate candidates: Reps. Ruben Gallego (D-AZ) and Elissa Slotkin (D-MI). According to insiders, this move left some GOP members questioning the industry’s political strategy.
Sen. Cynthia Lummis (R-WY), an outspoken supporter of pro-cryptocurrency legislation, speculated on the motives of her Democratic colleagues. “I have to say, I do wonder with some of them whether their sudden interest in digital assets is based on the industry’s involvement in these races,” Lummis remarked.
Recent data from Follow the Crypto, a research project led by Molly White, shows that cryptocurrency-related PACs have contributed more to Republican candidates, with $54.6 million in support compared to $34.7 million for Democratic candidates. The industry has also spent significantly more opposing Democratic candidates than Republicans, with $14.2 million spent against Democrats versus $283,000 against Republicans.
“There are a lot of feelings that I think quite personally are justified about the way Gary Gensler has treated the industry and how he’s been allowed to do that by the Biden Administration,” said an anonymous cryptocurrency advocate, referring to the Securities and Exchange Commission (SEC) chairman. Gensler, appointed by President Biden, has been a controversial figure in the industry for his stringent regulatory actions.
Beyond Gensler, Senator Elizabeth Warren (D-MA) has also been a thorn in the side of the cryptocurrency sector, pushing for stricter regulatory measures. PACs aligned with the industry have donated over $1.6 million to Warren’s Republican challenger, John Deaton, though he remains a longshot candidate in deep-blue Massachusetts.
“I think there’s no question a Republican Senate would be preferable to a Democratic-led Senate because of Elizabeth Warren,” stated Kristin Smith. “It doesn’t mean we don’t have great Democratic champions, but anything that gives Sen. Warren the ability to influence the agenda is problematic.”
Meanwhile, on the presidential front, Donald Trump has found unexpected allies in the cryptocurrency world. The Winklevoss twins, founders of the Gemini cryptocurrency exchange, contributed $1.7 million in Bitcoin to Trump’s campaign. The former president, who had been skeptical of cryptocurrency, recently made a public gesture of support by purchasing food with Bitcoin at a cryptocurrency-themed bar in New York.
In contrast, Vice President Kamala Harris, the Democratic presidential nominee, has signaled a more open stance on cryptocurrency than the current administration. “We will encourage innovative technologies like AI and digital assets, while protecting our consumers and investors,” she told donors in New York last weekend.
As the 2024 election approaches, the cryptocurrency industry finds itself navigating a fractured political landscape. With significant contributions already made and more expected in the coming months, the outcome of these races could shape the regulatory future of digital assets in the U.S. for years to come.
