The cryptocurrency industry is becoming increasingly involved in the 2024 U.S. election.
In particular, the industry is heavily investing in Super Tuesday primary contests in California, Alabama, and Texas to support crypto-friendly candidates and thwart those who are pushing for more regulation.
The success or failure of these candidates on Tuesday, when many races across America are narrowed down to two contestants, will reveal how much impact the increasingly wealthy crypto industry executives may have in November.
According to a Reuters analysis of data from OpenSecrets, a research group that tracks money in U.S. politics and its influence on elections and policy, several brand new industry super PACs have been formed, including Fairshake, Protect Progress, and Defend American Jobs, and have spent at least $13 million in Tuesday’s primary races.
These PACs, backed by funds from Coinbase and the Winklevoss twins, are independent fundraising groups that aim to support candidates who align with their vision and agenda.
The cryptocurrency industry has been surging in recent months, and Bitcoin hit a new high last week, following the collapse of several big players in 2022, which led to a regulatory crackdown.
As a result, the industry, including its employees and political action committees, has contributed around $59.2 million towards the 2024 election cycle, which is significantly higher than the $26.8 million contributed in the 2022 midterm cycle and $1.6 million in the 2020 cycle.
Fairshake has spent over $10 million to try to convince voters not to back California progressive Democrat Katie Porter, who is running for Senate.
Porter is a key target because she joined U.S. Senator Elizabeth Warren in 2022, seeking information from Texas’ electric grid operator on crypto mining operations in the state and how the power the industry uses affects climate change and the energy grid.
Protect Progress has also spent about $1.7 million to back Shomari Figures, a Democrat and former deputy chief of staff to U.S. Attorney General Merrick Garland running in Alabama’s 2nd congressional district race.
In Texas, Protect Progress has put about $962,000 in support of Representative Julie Johnson, a Democrat running in the state’s 32nd congressional district race.
Meanwhile, Defend American Jobs has allocated over $1 million to back Representative John Bradford III and Representative Tim Moore, both Republicans in North Carolina.
The interest of the cryptocurrency industry in the 2024 election comes on the heels of one of the biggest financial frauds on record.
FTX founder Sam Bankman-Fried was found guilty last year of stealing from customers and using those funds to donate more than $100 million to U.S. political campaigns.
Federal election disclosures show he gave roughly $40 million to mostly Democratic-aligned groups and campaigns.
An indictment also accused Bankman-Fried of directing two FTX executives to evade contribution limits by donating to Democrats and Republicans.
However, some of the recipients have since returned the money.
According to Ciara Torres-Spelliscy, a professor of law at Stetson University College of Law, the experience of FTX/Alameda should serve as a cautionary tale for any political campaign.
Notably, Alameda Research is Bankman-Fried’s hedge fund that focuses on cryptocurrencies.
It has been reported that the FTX/Alameda funds that were channeled into politics are currently subject to two different attempts to retrieve the money.
One attempt is from the bankruptcy estate of FTX, while the other is from federal prosecutors who consider the money to be the fruits of a crime.
These developments are significant, and they underscore the importance of ensuring that political campaigns are transparent and that the source of all funds is disclosed.
