How the crypto industry's $245M in donations reshaped Washington: CNBC Crypto World

The crypto industry wrote checks for tens of millions of dollars to support candidates on both sides of the aisle and across the country for the 2024 election. All in, crypto-related PACs and other groups, as well as individuals tied to the industry, reeled in over $245 million, according to Federal Election Commission data, marking a new fundraising all-time high for the industry. There's no question there was a lot of money involved from the crypto industry, and there was also a lot of voters who came together in a grassroots movement. So, you know, we don't set the rules of the game, but that's, that's how the game is played in the United States. Now, the sector has long felt like it's been treated unfairly by policymakers and regulators and saw an opportunity to rewrite the political landscape. Nonprofit watchdog group Public Citizen set in a report that crypto accounted for nearly half of all corporate dollars that flowed into the election, outraising sectors that have historically been known to lobby hard like oil and banks. We are going to have the most pro-crypto Congress ever, and Coinbase has played some part in all of that. We certainly lent our support to the Fairshake super PAC, and I think what we saw Fairshake do was weigh in on a handful of races and make sure that the crypto voters' voice was heard. One big claim from the industry was that across the country, including in battleground states and districts, there was a surge in single-issue pro-crypto voters. An October poll from Harris X, funded by the crypto industry, found that 49% of likely voters considered a pro-crypto stance from a candidate to be important. That poll also found that 13% of voters would consider crossing party lines to vote for a pro-crypto candidate. Coinbase also published data in partnership with Morning Consult, which found that 52 million Americans held crypto in 2023, which was seven times larger than the national popular vote split between Donald Trump and Joe Biden in the 2020 election. Coinbase claimed that the data showed that crypto was a key issue among voters in battleground states. But that's not how these interest groups targeted battleground voters. Fairshake, the largest of the crypto super PACs that received major donations from Coinbase, funded TV ads in support of pro-crypto candidates, but those ads didn't actually mention crypto. Instead of focusing their political ads on crypto, the industry funneled all their money through campaign, into the campaigns through so-called super PACs, which had these generic names like Fairshake, Defend American Jobs and Protect Progress. And what did they do? They produced equally generic political ads that literally never mentioned crypto. Despite the industry's claims of strong support, independent data from other organizations doesn't necessarily back that up. Data from the Federal Reserve found that just 18 million Americans owned crypto in 2023, compared to Coinbase's finding of 52 million at that same time. And a Pew Research poll released less than two weeks before Election Day found that 63% of Americans said they had little to no confidence in the current ways to invest in, trade or use cryptocurrencies. Still, the industry poured cash into the campaigns for pro-industry candidates. You've got the crypto industry lording around Washington, D.C. saying to politicians, you should enact our special agenda, you got elected because we spent money on you. And it's true, they spent money on them, but there is no mandate from the American people for anybody in Washington to do anything regarding crypto because crypto was not on the ballot. The race that got the most attention was for an Ohio Senate seat. Republican Senator-elect Bernie Marino flipped Democrat Senator Sherrod Brown's seat thanks in large part to the $40 million the crypto industry spent to help him defeat Brown, a three-term incumbent. Marino had virtually no political name recognition going into the race, but tens of millions of dollars in ad spend changed the game for him. Brown has a history of voting against pro-crypto legislation and sharing anti-crypto rhetoric on social media, making him a target among crypto interest groups. Crypto money was important in helping certain candidates and defeating other candidates. But the issue of crypto was never on the ballot anywhere. Think about this. It would be as if the Ford Motor Company spent $200 million on ads and never mentioned cars. Whether or not crypto was the issue that moved voters to their favorite candidates, the industry largely sees 2024 as a huge success, with nearly 300 pro-crypto lawmakers voted into House and Senate seats for the new session. And of course, there was the White House race. Donald Trump had an about-face on Bitcoin on the campaign trail and began touting himself as the pro-crypto candidate for president and vowed to make the U.S. the crypto capital of the world. As these lawmakers prepare to take office in January, the industry is hoping to play catch-up on regulation after multiple bills to launch a crypto rulebook have languished in the House and Senate. Our plan going forward is very much the plan that we've had in place for the past year or more. It's to build a consensus within the Congress that sensible rules for crypto that include investor protections, but also sensible standards for market structure, for stable coins and the like, remains a priority. Another major focus for companies in the space comes down to leadership at the SEC, which has been chaired by Gary Gensler since President Biden nominated him in 2021. Under his tenure, the agency has brought more than 100 enforcement actions against crypto firms, including Coinbase. A new SEC will have a new SEC chair. And I think it's safe to say that with a new chair, you're going to see a number of fresh eyes brought to the docket. There's no reason to commit to bad enforcement strategy and a misguided enforcement campaign when rulemaking is available, when consultation can result in much more durable solutions. I do think that we're going to see change come January across all these different matters. And in the meantime, we remain as confident in effort that if court litigation is required, we will prevail in each of those cases. The industry also expects lawmakers to be more bipartisan than it has been in years past, where Republicans were seen as the more crypto-friendly party. Before this race, we didn't have real bipartisanship, right? We didn't make inroads within the Democratic Party. We're seeing a lot more enthusiasm from the Democratic side. And you know, in Congress, you can't pass legislation unless it's bipartisan. So I'm disappointed that Kamala Harris and Tim Walz lost. But I think the work that they did positioned the Web3 and DeFi space for success, for bipartisan success, this Congress, this coming Congress. Midterms in 2026 are already a top-line item for the crypto lobby. If they see positive results in the next Congress, interest groups are ready to pour millions more dollars into congressional races next cycle. Coinbase, VC firm Andreessen Horowitz, and others have already pledged more than $78 million to the 2026 midterms. Coinbase has pledged to donating another $25 million to Fairshake in particular. In a recent comment from Fairshake, the pro-crypto PAC told CNBC that it's proud of its track record and winning seats in some of the toughest front-line races in the country. A representative for the committee added that they had stuck to their core strategy from day one, supporting pro-crypto candidates and opposing those who played politics with jobs and innovation. And ultimately, they had won. In my personal judgment, you know, I would prefer that the government was smaller and there was less ability for people to go in there and influence it. But because we have this big government and that's how the rules have been set, both money and the grassroots movement of voters coming together are super important.