Crypto firms spent $134M on 2024 US elections, raising influence concerns

Cryptocurrency companies spent more than $134 million on the 2024 US elections, fueling concerns about their growing political influence and potential risks to regulatory stability, according to a report by the Center for Political Accountability (CPA).

The growing connection of crypto firms with US politics is raising newfound concerns for regulators, investors and the wider financial system, according to a report released by the Center for Political Accountability (CPA).

Cryptocurrency firms shelled out a cumulative $134 million on the 2024 US elections in “unchecked political spending,” which presents some critical challenges, the March 7 report stated.

“While the companies making these contributions may be seeking a favorable regulatory environment, these political donations further erode public trust and expose companies to legal, reputational, and business risks that cannot be ignored,” the report added.

Cryptocurrency regulation has taken center stage over the past week following a historic executive order from US President Donald Trump to create a Strategic Bitcoin (BTC) Reserve ahead of the first White House Crypto Summit on March 7.

Source: politicalaccountability.net

Fairshake, a political action committee (PAC) backed by major crypto firms including Coinbase, Ripple and Andreessen Horowitz, was one of the largest contributors, spending more than $40 million to support candidates aligned with pro-crypto policies.

Fairshake and affiliated PACs were active in key congressional races, attempting to shape legislation favorable to digital assets.

“As the industry continues to seek influence through vast contributions and opaque financial maneuvers, the risks of instability, regulatory backlash, and public distrust only grow,” the report said.

Fairshake donations. Source: politicalaccountability.net

The influx of crypto money into politics did not go unnoticed by regulators. In August 2024, the consumer advocacy group Public Citizen filed a complaint with the Federal Election Commission (FEC), alleging that Coinbase’s corporate contributions to Fairshake and the Congressional Leadership Fund constituted a violation of federal election law due to their status as a federal contractor.

Coinbase has committed an additional $25 million to Fairshake for the 2026 midterm election cycle.

Coinbase commits $25 million to Fairshake. Source: Coinbase

“The stakes are too high for us to stand on the sidelines, and that’s why we at Coinbase are proud to help do our part,” the company wrote in an October 2024 blog post.

Crypto’s political donations may be necessary for regulatory clarity

Despite the risks highlighted by the report, some regulatory experts see the donations as necessary for advancing more innovation-friendly regulations.

“As someone deeply involved in crypto, I see this spending as necessary for regulatory clarity, crucial for stability and growth,” according to Anndy Lian, author and intergovernmental blockchain expert:

“It seems likely to boost investor confidence by reducing uncertainty, as seen in pro-crypto candidate wins boosting market sentiment, like bitcoin's post-election high.”

Still, risks, including “regulatory capture,” where the interests of large firms take priority, may present challenges and erode crypto investor trust. Still, this is part of the organic growth of the emerging crypto industry, Lian said, adding:

“The crypto community’s transparency and decentralization might mitigate this, ensuring fair regulations. While controversial, I don’t find it problematic, viewing it as the industry’s maturation, though public backlash could destabilize politics if seen as buying favor.”

The debate over crypto’s role in politics follows the high-profile collapse of the Libra (LIBRA) token, a memecoin endorsed by Argentine President Javier Milei. The project’s insiders allegedly siphoned over $107 million worth of liquidity in a rug pull, triggering a 94% price collapse within hours and wiping out $4 billion.

Over 100 governmental fraud complaints have been opened in Argentina since the Libra memecoin’s scandal, illustrating the risks of a country’s executive branch promoting “any kind of unregulated security,” the CPA’s report states.

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