About a week before the 2022 midterms, FTX, the cryptocurrency exchange founded by billionaire wunderkind Sam Bankman-Fried, began to collapse. The day before ballots were cast, the company announced it was seeking a bailout. A month later, Bankman-Fried had been arrested on a smattering of civil and criminal charges, including a number of campaign finance violations. Not long after that he was sentenced to 25 years behind bars.
The fallout for electoral politics was immediate. In the months prior to FTX’s implosion, Bankman-Fried had made himself the face of a crypto campaign-finance machine of spectacular might. For nearly the entire 2022 election cycle, he was the second largest Democratic donor after George Soros, putting up nearly $40 million to shape House and Senate races (a late spending surge by Michael Bloomberg knocked SBF to third). And that doesn’t count his millions in dark money donations, or those made by his close associates.
The goals were lofty: Bankman-Fried dressed up the reason for his political giving in aspirational language and philosophical commitments. He talked of pandemic preparedness, of climate change mitigation, and broad principles for an advanced vision for society.
He claimed to not even know what his preferred candidates’ positions on crypto regulation were. He was in it for the good of the country.
But the conviction of SBF and the death of FTX—and the subsequent clawing back of donations powered by stolen funds—sobered up a political class entranced by tales of “effective altruism.” Gone was the coziness between crypto and House super PACs. No one wanted to have to return ill-begotten cash again. It seemed that the fall of Bankman-Fried signaled the death of one of the biggest political spending machines in American history—a nail in the coffin for the respectability of the crypto lobby.
And yet, less than two years later, it is back with a vengeance. Faceless, but more menacing and powerful than ever, with four times the money, crypto is wreaking havoc on the 2024 election cycle. It’s haunting one Ohio senator in particular, threatening to throw majority control of the all-important chamber to Republicans.
This time, there’s no grand political theorizing. No time to waste on utopian futures or societal aspirations. In fact, Coinbase’s billionaire CEO Brian Armstrong, the closest thing to a leader of this political formation, has openly declared that the United States is a society in “decline” and that “backup” options for existing nation states must be pursued. No, the 2024 crypto money machine has been reborn out of a cold, hard determination to do one thing and one thing only: put politicians in power who will stay out of crypto’s way.
Fairshake, the industry’s super PAC, has raised an astonishing $203 million for the 2024 election cycle, according toan analysis of disclosures by campaign finance watchdog Open Secrets. Crypto accounts for nearly half of all corporate spending in the 2024 election, according to a report from Public Citizen. No other industry or interest group is even close: Runner-up Koch Industries has raised $26 million for the election cycle.
All of that money is being wielded specifically to influence lawmakers and elections on behalf of one piece of legislation, a favored regulatory proposal, a rarity in large-scale campaign spending. The bill in question—the Financial Innovation and Technology for the 21st Century Act, or FIT21—would confer legitimacy on the crypto industry by giving it a specific regulatory treatment, while shifting most of the oversight responsibility from the more formidable Securities and Exchange Commission to the lightweight Commodity Futures Trading Commission. (BothCoinbase andRipple have fought securities fraud charges from the SEC.)
Ohio Democratic Sen. Sherrod Brown, who has advocated for stricter regulation of the crypto industry in the past, is firmly in the lobby’s crosshairs. The group is spending an astronomical $40 million to oppose Brown, the chair of the Senate Banking committee, and support his Republican opponent in the race, the former car dealer Bernie Moreno. Brown was once favored in this toss-up election. If he loses, it’s a near certainty that Democrats will lose their majority in the Senate, and with it the ability to confirm Cabinet appointees, judges, and more, should they keep the presidency. That wild spending makes his victory look much more difficult. (“Money moves the needle,” Armstrong told Axios. “For better or worse, that’s how our system works.”)
Critically, none of the crypto-sponsored ads in the Ohio Senate race mention cryptocurrency, a strategy Fairshake has borrowed from another big-money outside-spending outfit, the American Israel Public Affairs Committee, which rarely mentions Israel policy in its attack ads against candidates it opposes. In certain spots, the Fairshake ads are fearmongering against immigrants and immigration, instead.
In some races, Fairshake hasn’t even spent money to effectuate its preferred outcome; it has merely lorded the millions of dollars it has stockpiled over the heads of candidates and threatened to spend against them. This strategy was used to great effect in the Montana Senate race. Earlier this year, Fairshake indicated it would enter the spending arena without announcing which candidate it would support; soon after, vulnerable incumbent Democrat Jon Tester, who has criticized the industry in the past, voted to pass pro-crypto legislation.
“I have not been able to find anything else like that in the past, where they just say, ‘We’re gonna have a ton of money hanging over your head,’ ” said Rick Claypool, research director for Public Citizen’s president’s office. “It’s a concern of ours, seeing as any other sector with an interest in influencing elections is likely watching this Big Crypto playbook. It’s something that we might see repeated in future elections by other corporations.”
In fact, as Punchbowl reported, the strategy of menacing candidates with the mere possibility of big spending has been successful enough that the group hasn’t even spent half of its funds. That remaining stockpile, according to Punchbowl, “will make vulnerable lawmakers anywhere think twice about criticizing the digital asset sector.” Said Claypool: “It’s like the corporate money Death Star, with a big powerful laser gun of cash, ready to end the political career of whoever steps out of line.”
So far, the tactics have been largely successful. In the 42 primary races where crypto-backed super PACs intervened, the crypto sector wonits preferred outcome in 36, according to analysis by Public Citizen. In just two cycles of spending, crypto corporations now rank second in total election-related spending over the past 14 years—the entirety of the Citizens United era. They trail only fossil fuel corporations, which have spent $176 million over that same period.
That spending has been purposefully bipartisan. Both Republican and Democratic candidates have benefited, and will continue to receive support through November. But the political preferences of the crypto industry have clearly tilted Republican. Both Marc Andreessen and Ben Horowitz of Andreessen Horowitz were Donald Trump endorsers (Horowitz also promised to donate to Kamala Harris). The Winklevoss twins, who have their own crypto exchange and have claimed to own at least 1 percent of the entire Bitcoin market for the past decade, made illegal donations to the Trump campaign. Silicon Valley Democratic megadonor Ron Conway cut ties with Fairshake after it announced its plan to blitz Sherrod Brown. Donald Trump has become a vocal cryptocurrency enthusiast, announcing all sorts of cryptomaximalist proposals, including his own crypto exchange, which is already rife with scammers and brings a whole host of conflict-of-interest concerns. Still, Kamala Harris has shied away from criticizing the industry, preaching a “reset” with crypto. She has plenty to lose by crossing this lobby, too.
The upshot is that crypto may have given up on its claims to be a radically innovative, world-changing financial technology. But it is getting closer than ever to becoming an election-changing financial technology, one that could single-handedly preempt the ambitions of the first two years of a Harris presidency—while writing the playbook for other industries to do the same in years to come.
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