Crypto companies are spending millions to influence the forthcoming elections; a researcher says such spending could weaken lawmakers.
The crypto industry has continued to be a major deciding factor in the upcoming US election, as top cryptocurrency companies have become some of the biggest corporate political donors ahead of the upcoming 2024 US election.
According to a report by Public Citizen, out of the $248 million in corporate political donations so far, crypto corporations have been more dominant, accounting for about 48% of the total money. These funds are being donated to buy influence over the upcoming election.
The top spenders among crypto corporations include Coinbase and Ripple, whose spending has amounted to $99 million, according to Rick Claypool, a researcher for Public Citizen. The total amount donated to the upcoming 2024 election by crypto companies has so far reached over $119 million, with the main goal of using the funds to push for crypto-friendly candidates. The report stated:
“Crypto-sector corporations – primarily Coinbase and Ripple – have dumped over $119 million in real dollars into the 2024 elections so far, almost entirely into super PACs dedicated to elevating pro-crypto candidates and attacking crypto skeptics.”
Fairshake PAC, a political group established to support crypto-friendly candidates in the US, has been the primary beneficiary of the corporate crypto cash. The group has raised $202.9 million, with over $107.9 million coming from both Coinbase and Ripple.
The political group has also received donations from top billionaires within the industry, including $44 million from Andreessen Horowitz, $5 million from the Winklevoss twins, and another $1 million from Coinbase CEO Brian Armstrong. These donations have made Fairshake one of the most well-funded PACs in the forthcoming election. The report said:
“The rest of the PAC’s funds mostly comes from billionaire crypto executives and venture capitalists, including $44 million from the founders of venture capital firm Andreessen Horowitz, $5 million from the Winklevoss twins, and $1 million from Coinbase CEO Brian Armstrong.”
Concerns over Crypto Influence on Lawmakers
Large spending as such could influence lawmakers, forcing them to weaken crypto regulation, which might harm consumers. The report referenced the lack of intrinsic value and high volatility of the crypto market.
Claypool also referred to the collapse of the FTX exchange, led by Sam Bankman-Fried, stating that there is a chance for fraud and abuse of digital currencies, should a crypto-friendly candidate emerge as the winner, as an insider could use their position for personal interest. He said:
“As the massive fraud perpetrated by Sam Bankman-Fried’s fallen crypto exchange FTX showed, untrustworthy insiders can abuse consumers, using their payments of real cash for personal purposes.”
The claim by crypto enthusiasts that it could be a future decentralized currency was criticized, as its volatility and what the writer called “Ponzi-like schemes” have led its value to be considered dubious. With crypto companies spending heavily to influence the election, there is a possibility that other sectors may follow the same step.
