Crypto Cash Helps Propel Trump, Other Allies to 2024 Election Victory

The Washington Post / Tony Romm

13:11 JST, November 7, 2024

Cryptocurrency companies, executives and investors rejoiced Wednesday over the outcome of the 2024 election, believing their aggressive spending helped to secure a wave of new allies in the fight against harsh government scrutiny and unwanted regulation.

To improve their standing in Washington, some of the country’s crypto elite had spent years pouring money into politics: They donated heavily to former president Donald Trump, while flooding congressional races nationwide with advertisements that promoted crypto-friendly candidates.

Soon after the polls closed, those efforts appeared to pay off. Trump clinched a return to the White House, and by Wednesday afternoon, 43 of the 58 congressional candidates backed by a trio of new crypto-funded super PACs had been declared the winners of their races. The groups, led by the organization Fairshake, spent more than $130 million nationally to advertise in congressional contests, some of which have not yet been called.

In Ohio, for example, the industry helped to topple Sen. Sherrod Brown, a Democratic incumbent and crypto skeptic who chairs the powerful Senate Banking Committee that oversees digital finance. The Fairshake network spent $41 million to promote Brown’s victorious opponent – Republican challenger Bernie Moreno – running favorable ads that focused on jobs and immigration, not cryptocurrency.

The results nationally sent the price of bitcoin soaring above $76,000, as crypto enthusiasts delighted in the hope that Trump might follow through on his promise to make the United States the “crypto capital of the planet.” The former president only months ago helped launch a cryptocurrency venture, called World Liberty Financial, further endearing him to currency owners and investors.

Some crypto executives also began discussing ways to leverage their winnings, hoping to steer Trump toward pro-crypto advisers while refocusing Congress on crypto-friendly legislation. That includes an industry-backed bill that passed the House earlier this year, then languished in the Senate, that would essentially strip the Securities and Exchange Commission of some crypto oversight. It would shift more responsibility to the Commodity Futures Trading Commission, an agency that crypto companies see as a better fit – but one that Democrats have blasted as weaker.

“Last night was a seminal moment for crypto,” said Paul Grewal, chief legal officer of Coinbase. “I think what elected officials all ought to pay attention to is [that] this is an industry committed to the effort for the long term.”

Even before the 2024 election concluded, Fairshake announced that it had amassed $78 million for the 2026 midterms, with new financial commitments from firms including Coinbase. The company supports other political groups, including Stand With Crypto, which seeks to rally pro-crypto voters. (The organization sponsored an election-night party at The Washington Post.)

For years, crypto executives and investors have chafed at heightened oversight under President Joe Biden, whose administration sought to crack down on the industry after the 2022 collapse of FTX, once the world’s third-largest crypto trading platform. Federal regulators have tried to root out scams, collect taxes on crypto investment gains and treat more digital tokens like securities, not commodities, in ways that would subject them to heightened government oversight.

Much of the scrutiny has come from the SEC, whose chairman, Gary Gensler, has brought major cases in recent years against Coinbase, Ripple and Binance, another crypto platform, alleging that they operated as unregulated securities or failed to adhere to investor protection laws. All three companies have denied the charges vigorously, while some crypto giants have mounted a new campaign in Washington to remake the regulatory landscape, particularly at the SEC.

Some crypto leaders quickly flocked to Trump: They held high-dollar fundraisers for him in the Bay Area, and huddled with the former president to talk privately at his Mar-a-Lago Club. The president’s backers included major Silicon Valley investors David Sacks, Chamath Palihapitiya, and Tyler and Cameron Winklevoss, the twin founders of the crypto platform Gemini. Their support appeared to help fuel his conversion into a crypto supporter, years after he declared during his first term that the industry was a “scam.”

At a bitcoin gathering in Nashville this summer, Trump promised to commission a council of crypto experts and pursue policy “written by people who love your industry.” He pledged to create a national stockpile of bitcoin and to fire Gensler at the SEC – a commitment that sparked raucous applause this summer, and renewed cheering after Trump clinched victory Wednesday.

“Imagine how much we are going to accomplish in the next 4 years now that the crypto industry won’t be hemorrhaging $ billions on legal fees fighting the SEC and instead investing this money into building the future of money,” Cameron Winklevoss posted on X. “Amazing awaits.”

Over the past two years, the crypto industry also poured money into congressional races around the country, seeking to elevate lawmakers who might vote to expand access to digital finance and reduce some regulatory guardrails. It marked the first election cycle for Fairshake and its two affiliates – Defend American Jobs, a super PAC focused on Republicans, and Protect Progress, which backed Democrats – which emerged as one of the leading spenders in all of politics.

The groups spent about $3.4 million on Jim Justice, the newly elected Republican senator for West Virginia, and shelled out nearly $2.9 million for Shomari Figures, a Democrat vying for a House seat in Alabama. They also supported incumbents who sit on key congressional committees overseeing crypto – including Reps. Tom Emmer (R-Minnesota) and Josh Gottheimer (D-New Jersey), two members of the House Financial Services Committee.

And the Fairshake network spent more than Moreno’s own campaign to help the Republican challenger prevail in Ohio. The groups believed their ad blitz had resulted in a “significant improvement” in Moreno’s chances, turning what was once a roughly seven percentage point deficit into what ultimately became a victory on election night, according to an early October memo later obtained by The Washington Post.

“Senator-Elect Moreno’s come-from-behind win shows that Ohio voters want a leader who prioritizes innovation, protects American economic interests, and will ensure our nation’s continued technological leadership,” said Josh Vlasto, a spokesman for the super PACs.

None of the ads mentioned crypto. But many candidates separately indicated that they would pursue industry-friendly rules in Washington – setting up the crypto industry to push favorable legislation starting in 2025.

“We’re celebrating, but we’re also regrouping and figuring out how to take advantage,” said Kristin Smith, president of the Blockchain Association, a Washington-based lobbying group that focuses on the technology underlying bitcoin and other digital currencies.

“The biggest takeaway is, there’s no upside to being anti-crypto,” she continued. “I don’t think any upstart industry wants to go into the business of having a super PAC … [but] the way we’ve been treated the last three to four years has forced the industry’s hand.”