Cryptocurrency industry pours avalanche of money into US election campaign

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By the end of May, the cryptocurrency industry had raised at least 187 million US dollars for the current US election campaign. This was compiled by crypto critic Molly White from publicly accessible data. White has programmed the website followthecrypto.org (open source). It shows how much money has flowed into the largest super PACs that support cryptocurrency-friendly candidates or want to prevent consumer protection-oriented candidates.

The largest crypto super PAC is called Fairshake and is practically the same size as Make America Great Again (MAGA), the main super PAC supporting Donald Trump, who is making his fourth run at the White House: MAGA has raised $178.6 million through the end of May, Fairshake $177.9 million. However, MAGA has already spent more of it, which is why Fairshake is clearly ahead in terms of money raised (107 million dollars, possibly plus 25 million dollars that are likely to be parked at Coinbase, compared to 94 million dollars at MAGA).

Unlimited donations to super PAC possible

PAC stands for Political Action Committee. These are traditionally campaign funds of political candidates. Maximum contributions per donor apply to these. However, there are no limits for super PACs. Americans can make unlimited donations to them. However, super PACs are not officially allowed to coordinate their campaigns – with the candidates they support.

Fairshake has so far spent most of its money on fighting Democratic Party candidates. Fairshake has spent more than ten million dollars on negative advertising against Democrat Katie Porter alone – successfully: the Californian lost the primary and therefore cannot be elected to the US Senate in November. Fairshake spent another two million dollars on advertising against Democrat Jamaal Bowman, who also lost the primary. The New Yorker will therefore certainly not move into the lower house.

Fairshake has given even more money, 15.5 million dollars, to two other super PACs. Five million to Protect Progress, which aims to support crypto-friendly Democrats, and twice as much to Defend American Jobs, which aims to help crypto-friendly Republicans win elections. It should be noted that the reported donation amounts do not correspond to expenditure plus cash reserves. This is due in part to the fact that super PACs must report their spending within 48 hours, but their receipts are only totaled monthly, and with a delay. As a result, there is no data on donations in June yet, but there is data on election spending in July.

Change of opinion with Trump

Lobbyists in the crypto industry want politicians to believe that cryptocurrency is an important issue for voters. The organization Stand with Crypto shows an even slightly higher donation amount on its website (as some smaller crypto super PACs are probably included). According to this, 1.3 million donors have donated 179.4 million dollars.

This may be true, but it leaves the misleading impression of a large grassroots movement. Because the vast majority of the money comes from a small number of crypto tycoons: Fairshake has received $46.5 million from crypto exchange Coinbase, $45 million from Ripple Labs, $44 million from venture capitalist Andreessen Horowitz, $15 million from Jump Crypto, $5 million from Winkelvoss Capital Management, and $1 million each from Kraken, Circle and Union Square Ventures. (These amounts also include donations from the owners or managers of these companies). For the other two crypto super PACs mentioned, the bulk of donations are spread across even fewer companies. Small donors – unlike Joe Biden's re-election campaign – are not a factor.

The advertising has already had an effect on Donald Trump. While he used to be a harsh critic and described cryptocurrencies as a scam, even wanting to have them shut down, he began issuing NFTs himself in 2022. "If you're for crypto, you better vote for Trump", the ex-president now says.

Incumbent Joe Biden, on the other hand, has barely commented on cryptocurrencies. However, a presidential decree from March 2022 is dedicated to the topic of digital assets and blockchains. In it, Biden calls for measures for consumer protection, financial stability and combating crime, among other things, but also to "support technological progress to promote the responsible development and use of digital assets." Nevertheless, the crypto industry has designated Donald Trump as its hero and Biden as its opponent.

Irrelevant topic

In fact, the US electorate shows little interest in crypto issues. This is even revealed by a survey commissioned by the lobby organization Digital Currency Group in six US states where the election outcome is contested ("swing states"). Of 1,201 respondents registered as voters there, 80 percent explicitly disagreed with the statement that crypto is an important issue in the election decision. And the remaining 20 percent are by no means all crypto supporters, as 69 percent of all respondents reported a negative attitude towards cryptocurrencies.

It is therefore only surprising at first glance that the election advertisements financed by Fairshake mostly leave the topic of cryptocurrency unmentioned. Overarching topics such as technology or finance also barely feature. Instead, entirely different arguments are used to explain why voters should (not) vote for certain candidates. Drawing the electorate's attention to candidates' opinions on cryptocurrencies is obviously not in the interests of the industry.

Incidentally, Molly White's transparency project Follow the Crypto is alsofunded by donations. Like Molly White's well-known newsletter Citation Needed, the project is ad-free. The American invites politically motivated people to use the Follow the Crypto source code to make donations from other sectors or interest groups more transparent. However, collecting the data yourself is time-consuming.

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