Explainer: Crypto industry spends millions on US midterm elections


Nov 8 (Reuters) – The cryptocurrency industry has spent millions of dollars on U.S. midterm election races in a year of heavy losses and upheaval in the sector, hoping to gain traction with lawmakers as Congress debates tighter regulation of digital assets.

Crypto evangelists view 2023 as a critical year for regulation, with Congress expected to make progress on legislation on digital commodities and stablecoins, a form of cryptocurrency pegged to the US dollar. Crypto companies are eager to support industry-friendly political candidates.

The election comes at a time of turmoil for the crypto industry. Bitcoin’s price has slumped about 70% from its peak, investors are more worried about the risk of cryptoassets, and on Tuesday crypto giant Binance tentatively agreed to buy FTX’s non-US unit to help the rival exchange cover a “liquidity crisis.”


FTX CEO Sam Bankman-Fried has far surpassed anyone else in the crypto industry. His contributions of nearly $40 million to campaigns this election cycle make him the sixth-largest individual donor in the United States, according to OpenSecret’s largest individual donor list,

The vast majority of his spending was in support of Democrats, according to OpenSecrets.

The deal with Binance announced by Bankman-Fried on Tuesday marked an abrupt change in fortunes for the crypto entrepreneur.

Ryan Salame, CEO of an FTX subsidiary, was the 14th largest individual donor on the list, giving more than $23.6 million, all to Republicans, including $11,600 supporting Rep. Alex Mooney, a Republican from West Virginia.

FTX did not respond to a Reuters request to confirm these figures.

Skybridge Capital, the digital investment management firm founded by Trump’s former White House communications director Anthony Scaramucci, contributed $100,000 to the Crypto Innovation super PAC this year, as did Scaramucci himself.

“The people have spoken: they believe in the promise of blockchain technology, they want more financial inclusion, and they demand that the politicians listen. That’s why we at SkyBridge have bet so much on cryptocurrency – and like Vigtig, on the underlying blockchain technology ,” a Skybridge spokesman said.


Legislators interested in codifying crypto laws, as well as chairmen of influential committees, have received cash from crypto-related PACs.

Two of the largest public crypto companies in the United States, Coinbase ( COIN.O ) and Robinhood ( HOOD.O ), also have PACs that spent more than $11,000 and $44,000, respectively, leading up to the midterm elections, according to FEC data and confirmed by the companies.

Coinbase, Robinhood and the industry trade group Chamber of Digital Commerce all had their PACs donated to Rep. Patrick McHenry, FEC records show. As the top Republican serving on the House Financial Services Committee, McHenry is likely to become its chairman if Republicans win control of the House. The Chamber of Digital Commerce did not respond to a request to confirm its contributions.

Crypto Innovation super PAC spent at least $167,000support McHenry’s re-election campaign by paying for ads and direct mail campaigns. The group did not respond to a request to confirm its contributions.

Coinbase, Chamber of Digital Commerce and crypto-focused HODLpac donated to Sen. Ron Wyden, the Democratic chairman of the Senate Finance Committee, according to FEC records. Crypto Innovation PAC spent more than $356,000on independent expenses in support of Sen. John Boozman, the top Republican on the Senate Agriculture Committee.


Crypto firms can hope to influence the laws as policymakers push forward digital asset legislation in the coming months.

McHenry and Rep. Maxine Waters, a Democrat who now chairs the House Financial Services Committee, is negotiating a bipartisan stablecoin bill. Although the details have yet to be finalized, most analysts see stablecoins as the easiest crypto issue for lawmakers to tackle.

Crypto companies like Circle want lawmakers to create a framework for stablecoins to help mature the industry and codify consumer protections. Currently, there is no federal regulator overseeing stablecoins.

Boozman and Stabenow, along with Senators Cory Booker and John Thune, have introduced the Digital Commodities Consumer Protection Act of 2022, a bipartisan bill that would give the CFTC more authority to regulate cryptocurrency.

Some in crypto, such as Ryan Selkis, founder and CEO of crypto market intelligence firm Messari, have expressed concern that the bill would pose an existential threat to decentralized finance (DeFi), which requires decentralized crypto exchanges to register with the Commodities Futures Trading Commission (CFTC ). ) ).

The DeFi supporters in particular, and crypto companies more generally, are likely hoping that their campaign contributions will help them make their case to the election winners.

Reporting by Hannah Lang in Washington; Editing by Lananh Nguyen and Megan Davies and David Gregorio

Our standards: Thomson Reuters Trust Principles.


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