Coinbase Pumps Millions into U.S. Congress as Crypto Gains Political Clout: Bloomberg Report

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As a seasoned political analyst with over two decades of experience, I have witnessed the ebb and flow of corporate influence in elections, and the crypto industry’s recent foray into political campaign donations is no exception to this trend. The actions of Coinbase, a key player in the digital asset market, are particularly intriguing given their strategic support for congressional races rather than presidential candidates.

Donald Trump has gained significant recognition within the cryptocurrency sector, relying on crypto supporters for votes and donations during his campaign. However, as per a recent Bloomberg article, major players in the crypto world, such as Brian Armstrong, Co-Founder and CEO of Coinbase, have noticeably failed to appear on his list of financial supporters. This absence is also observed in Super PACs associated with Coinbase. It’s worth mentioning that neither Trump nor Vice President Kamala Harris has received financial backing from Armstrong or his exchange.

Instead of primarily supporting presidential candidates, Coinbase has chosen to direct its financial backing towards congressional elections, as reported by Bloomberg. This strategic move is causing a stir in elections nationwide, making cryptocurrency a hot topic in political debates. The strategy seems effective, given the increasing bipartisan support for crypto-related bills sponsored by Republicans, one of which was passed in the House of Representatives in May 2024. Similar efforts are now being made in the Senate, further expanding the industry’s political clout.

According to information from OpenSecrets, as referenced by Bloomberg, Coinbase stands out as the biggest cryptocurrency donor in the United States, with contributions that contribute significantly to an overall industry spend of approximately $250 million on political campaigns in 2024. Specifically, Coinbase has reportedly contributed over $52 million, making it a significant force in U.S. politics. However, critics voice concerns about the industry’s methods, warning of potential risks associated with such extensive corporate influence on elections. A report from Public Citizen goes as far as to describe the crypto industry’s spending as resembling a “corporate Death Star,” potentially intimidating individual candidates and altering congressional races to meet corporate interests.

Meanwhile, advocates contend that firms such as Coinbase are vigorously supporting the needs of millions of Americans seeking digital asset opportunities. They strive to drive legislation forward, creating defined regulatory systems for crypto ventures and minimizing the dependence on what’s often seen as reactive regulation by the SEC. This legal certainty is vital for entities like Coinbase, currently engaged in a court battle with the U.S. SEC, a conflict that could potentially reduce its revenue by approximately 30%, according to Oppenheimer analyst Owen Lau.

Apart from traditional campaign contributions, Political Action Committees (PACs) that focus on cryptocurrency, such as Fairshake (supported by Coinbase among others), have played a significant role in influencing primary elections. They’ve reported a winning streak of 36 out of 42 instances where they were involved. Of particular interest, the PAC has taken credit for defeating progressive Democrats Jamaal Bowman and Cori Bush in recent primaries, as reported by Bloomberg.

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2024-09-17 00:05