By Joe Wright
Editor: Yu Zhou, Barron's
Cryptocurrency companies are planning to pour cash into the 2024 U.S. presidential election, and there are already signs that the money is winning the industry more friends in Washington. Bitcoin and other tokens, as well as trading platforms like Coinbase Global (COIN), will benefit.
This week, cryptocurrency industry executives are planning to raise campaign funds for Senate Finance Committee Chairman Ron Wyden, D-Ore., and Senate Banking Committee member Bill Hagerty, according to people familiar with the matter.
Both senators, along with other lawmakers, spoke at cryptocurrency news site CoinDesk’s Consensus conference in Austin, Texas. A spokesman for Haggerty did not respond to a request for comment.
A spokesman for Wyden said the senator has “long advocated for consumer-focused regulation when it comes to cryptocurrency” and opposes regulations that target the technology rather than individual criminals.
Previously, cryptocurrency company Ripple Labs announced on Wednesday, May 29, that it would donate another $25 million to the pro-cryptocurrency super PAC Fairshake. Ripple had already donated $25 million in 2023.
The cryptocurrency industry has a long list of expectations from the government and Congress. Companies including Ripple and Coinbase are battling lawsuits from the U.S. Securities and Exchange Commission (SEC) over alleged violations of securities rules. They and other companies deny the allegations and say Congress needs to pass laws clarifying how the industry can legally operate in the country.
“Ripple will not remain silent, and neither should the cryptocurrency industry, as unelected regulators actively seek to thwart the innovation and economic growth that millions of Americans take advantage of,” Ripple CEO Brad Garlinghouse said in a statement accompanying the announcement. “Until we see meaningful change, the cryptocurrency industry intends to continue investing heavily in this effort.”
A report this month from Public Citizen, a consumer advocacy group that is often critical of the cryptocurrency industry, showed that political action committees led by the cryptocurrency industry have amassed more than $100 million this election cycle.
The group said that number ranks third among all super PACs involved in the 2024 election. The report said major donors to crypto PACs include Ripple and Coinbase, as well as executives from venture capital firm Andreessen Horowitz and trading platform Gemini Trust co.
Politicians have taken notice. This month, Democrats crossed the aisle to help Republicans pass a resolution to roll back SEC guidance and make it harder for banks to regulate cryptocurrencies, despite a veto threat from the White House. Last week, 71 House Democrats joined Republicans in voting for an industry-backed bill that would limit the SEC’s authority over cryptocurrency trading.
In a surprise move, the SEC approved the rule change that paves the way for an ether exchange-traded fund (ETF) to become the first spot cryptocurrency, while Democratic lawmakers who have criticized similar decisions in the past remained mostly silent.
Meanwhile, former U.S. President Donald Trump has used multiple opportunities to appeal directly to cryptocurrency donors. His campaign began accepting crypto donations last week.
“I am very positive and open minded about cryptocurrency companies, and all things related to this emerging industry,” Trump wrote on Truth Social last weekend.
Recent events suggest that “this spending has paid off for cryptocurrencies,” TD Cowen analyst Jaret Seiberg wrote in a research note this week.
Lighter regulations would be a welcome relief for investors in tokens and the platforms that trade them. Analysts say a failure in the SEC case could force Coinbase to delist some token exchanges and stop offering other products in the U.S.
On the other hand, a looser regulatory stance could make it easier for traditional Wall Street firms to invest in and offer products around Bitcoin and other cryptocurrencies, increasing demand and supporting prices.
More than $100 million is a huge amount of cash by Washington standards, but for this industry, it may be money well spent.
