The cryptocurrency industry is making an unprecedented push to influence the 2024 US elections, pouring tens of millions of dollars into political campaigns and lobbying efforts. With crypto firmly on the national agenda, the industry sees the upcoming presidential and congressional races as pivotal for shaping future crypto regulations.
Records Smashed for Crypto Political Donations
According to recent reports, crypto donors have already contributed over $91 million to federal campaigns and political action committees (PACs) since the start of 2023. This shatters the previous record of $83 million donated during the entire 2020 election cycle.
The massive fundraising highlights how the crypto world is rapidly ascending as a powerful political force in Washington. Virtually all of the biggest players – major exchanges, wealthy investors, advocacy groups and tech billionaires – are going all-in to back crypto-friendly candidates.
Leading the charge is Fairshake, a pro-crypto Super PAC that has raised a staggering $85 million to support blockchain-backing politicians. Its donors include Coinbase ($20.5M), Ripple Labs ($20M), Andreessen Horowitz partners Marc Andreessen and Ben Horowitz ($9M each), and billionaire trader Jeffrey Yass ($70M+).
With its war chest, Fairshake has helped make crypto a deciding issue in key primary races. The group spent over $10 million successfully opposing Democrat Katie Porter’s Senate bid in California through a blitz of negative ads.
Meanwhile, two Fairshake-affiliated PACs – Defend American Jobs and Protect Progress – have ploughed nearly $500,000 into Republican and Democratic congressional primaries over the past two months alone. The spending helped pro-crypto candidates like Mark Messmer (R-IN) and Shomari Figures (D-AL) advance to the general election.
The Crypto Candidate Courtship
So why is the crypto industry throwing around such enormous sums? The simple answer is regulatory uncertainty. Eight years after Bitcoin’s inception, there remains no clear national framework governing cryptocurrencies and related technologies in the United States.
This lawmaking void has increasingly given rise to a patchwork of state policies, regulatory crackdowns, and enforcement actions that crypto advocates see as hostile to innovation. The SEC’s lawsuits against Ripple and other major crypto players have particularly galvanised the industry’s political backlash.
By pumping money into campaigns, crypto donors aim to elect politicians who are amenable to light-touch regulations, allowing their preferred technologies and business models to thrive. The endgame is comprehensive crypto legislation that provides clarity and safe harbours rather than stifling oversight.
Hence groups like Fairshake explicitly state their mission is backing candidates who will “establish and adopt much-needed regulations for the cryptocurrency industry.” Fairshake and other donors make no secret they are aggressively playing in primaries to hand-pick the most crypto-aligned nominees.
The 2024 Crypto Election?
While the industry’s political expenditures span congressional and state legislative races across the country, the biggest prize is undoubtedly the 2024 presidential election between incumbent Joe Biden and former president Donald Trump.
The two frontrunners have starkly divergent attitudes toward crypto that could shape policies for years to come. Biden’s administration and appointed regulators like SEC Chair Gary Gensler have pursued a more aggressive regulatory line that the industry considers “hostile.”
In contrast, Trump has pivoted toward championing crypto development and innovation within the United States. In recent comments, Trump decried businesses “leaving the country because of the hostility” under Biden and said “we have to embrace [crypto].”
The contrasts extend to campaign wallets. Trump – who has endorsed creating a federal “Cryptocurrency Modernization” office – has actively courted crypto donors in a bid to close his fundraising deficit versus Biden. “If you’re in favour of crypto, you better vote for Trump,” he stated plainly in one Q&A session.
Indeed, new polling from the Digital Currency Group (DCG) suggests crypto could prove a decisive issue for voters in 2024. Per their survey across key swing states:
20% of voters say crypto is a major factor influencing their choice;
48% distrust candidates who could hamper crypto innovation;
30% are more likely to vote for pro-crypto candidates.
“This data shows crypto is top of mind for voters in swing states and that a pro-crypto position is a net positive for policymakers,” stated DCG’s policy VP Julie Stitzel. “The poll also underscores a strong desire for reasonable regulations that protect consumers without stifling innovation.”
Navigating the Regulation Maze
Despite the crypto world’s growing clout, industry insiders warn that comprehensive legislation remains an arduous uphill battle regardless of who captures the White House or controls Congress.
“Even if Republicans take everything, I still think it’s a 2-3 year process at a minimum to get crypto right legislatively,” said lobbyist Kristin Smith of the Blockchain Association.
Kyle Bligen from the tech advocacy group Chamber of Progress emphasised that to increase the number of individuals supportive of cryptocurrency, it is essential for every office to be equipped with a foundational knowledge of what cryptocurrency entails and its significance for their constituents. He pointed out that this understanding is crucial for fostering a more crypto-friendly environment.
Others argue that to win over sceptics, the industry must compromise on certain priorities, such as radical privacy protections for crypto transactions. “Tornado Cash is not a hill I’m willing to die on,” said Texas Blockchain Council’s Lee Bratcher, referencing the infamous sanctioned crypto mixer.
Given the strident partisan divisions paralysing D.C., some crypto proponents argue that productive lawmaking may prove easier at the state level – at least initially. Advocacy groups are pressing legislatures across the country to enact crypto-friendly policies.
Dennis Porter of Satoshi Action Fund mentioned that their approach would involve advocating for pro-digital asset policies on a state-by-state basis, using the states as experimental grounds for democracy. He explained that eventually, the successful ideas generated from this process will be used to influence federal policy.
As of May 2024, Porter’s group has introduced pro-Bitcoin mining and self-custody bills in 16 states, with the proposal closest to passing in Oklahoma. A similar state-level playbook helped the cannabis industry gradually increase federal momentum and legitimacy.
The Long Game for Crypto in Politics
Regardless of the fortunes crypto backers find in the 2024 election cycle, it’s clear the industry now sees political advocacy and lobbying as indispensable to its long-term trajectory.
While crypto spending in 2024 may seem eye-popping on its surface, savvy Washington operatives understand it could be a bargain if it spurs accommodating regulations. After all, the crypto industry’s total market capitalisation exceeds $1.2 trillion as of early 2024.Smith of the Blockchain Association stated that the operation has become much more sophisticated, emphasising that the crypto industry is now actively working to influence Washington and is utilising all available tools to achieve this goal.
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