Coinbase recently announced its participation in a fundraiser to support political candidates associated with the cryptocurrency industry. Together with other giants such as Kraken, Ripple and Andreessen Horowitz, a staggering $78 million has been raised. It is intended to support “pro-innovation” political figures in the upcoming 2024 elections.
Cryptocurrency political offensive
Contrary to the original reports, the latest information indicates that a significant portion of the funds raised have been used to support Patrick McHenry, chairman of the House of Representatives Financial Services Committee. Unusually, McHenry has announced his planned retirement in 2025, which puts the extent and nature of the group’s support in a new light.
Coinbase, in presenting its position on the issue, stressed the key role of political elections and the need for appropriate regulation for the cryptocurrency sector. In a blog statement related to the Fairshake political activity committee, the company noted: “The future of the cryptocurrency sector in the U.S. depends on electing the right candidates and establishing policies that promote transparency and fair regulation, particularly through the oversight of designated regulators who take the right approach to enforcement.”
Fairshake, described as a Super PAC, pledges support for the candidates through independent action, as evidenced by their registration with the Federal Election Commission. However, according to information released by ProPublica, most of the funds raised have gone to McHenry, as well as Rep. Ritchie Torres of New York and Rep. Tom Emmer of Minnesota.
Need turns into necessity
Against the backdrop of growing interest and lobbying efforts in the cryptocurrency sector, federal spending in 2022 has doubled compared to the previous year. According to data from Open Secrets, Coinbase and Binance were among the largest investors in lobbying efforts. In turn, the biggest beneficiaries of these activities were Chairman McHenry and Senator Kirsten Gillibrand of New York, who sits on the Senate Banking Committee.
The increased lobbying efforts come in response to a tumultuous year for the cryptocurrency industry, with the criminal trial of former FTX CEO Sam Bankman-Fried and the departure of former Binance CEO Changpeng Zhao.
In legislative terms, the cryptocurrency sector faces significant challenges in 2024. Lawmakers are seeking to regulate stablecoin at the federal level and adopt a comprehensive approach to regulating the sector. Despite the passage of two bills by the House of Representatives Financial Services Committee in July, their path to the Senate Banking Committee may be more difficult, posing significant challenges for the coming year.
Ohio targeted by Coinbase
Coinbase is additionally focusing its attention on the state of Ohio, holding events in Columbus, launching ads and undertaking campaign activities in the state. All of this is in the context of the upcoming elections, where Senator Sherrod Brown is running for re-election. He has so far been skeptical of cryptocurrencies, expressing concerns in October about their potential use to fund terrorism.
