Cryptocurrency companies have spent $134 million to finance political campaigns in the United States in 2024, according to a report from the Center for Political Accountability (CPA). Analysts at the non-profit organization, which tracks corporate spending on sponsoring election programs, note that the growing connection of crypto firms with US politics is causing concern among regulators, investors, and society as a whole, writes RBC Crypto.
“Companies making such contributions may be seeking to create a supportive regulatory environment, but these political donations further erode public trust and expose firms to legal, reputational and business risks that cannot be ignored,” the CPA report said.
Industry players like Kraken and Coinbase funded politicians while also litigating with regulators, and those lawsuits were dropped after the new administration took office, the report says.
Coinbase and Kraken each donated $1 million to Trump’s inauguration fund, and Kraken founder Jesse Powell donated $845,000 of his personal funds in the cryptocurrency Ethereum to the president’s campaign fund last summer. In late February, the U.S. Securities and Exchange Commission (SEC) announced that it had dropped its case against Coinbase, and a similar announcement was made regarding Kraken in early March.
While the dismissals of the lawsuits are a major victory for crypto exchanges, the underlying issues that prompted the regulatory scrutiny still remain and should be discussed as an element of risk for potential investors and consumers, experts say. The SEC's main complaint was that some cryptocurrencies fall under the definition of securities, meaning they and the platforms that provide access to them should be regulated under securities laws.
To support and promote pro-cryptocurrency politicians, FairShake was created in 2023. It is a political action committee (PAC) that distributes contributions from its members to sponsor certain candidates or political programs. Its creation was supported by Coinbase, Ripple, and Andreessen Horowitz. The FairShake committee alone allocated more than $40 million to finance pro-cryptocurrency politicians in 2024.
In August 2024, the nonprofit watchdog organization Public Citizen filed a complaint against Coinbase with the Federal Election Commission, alleging that the exchange’s contributions to FairShake and another committee violated election finance laws. Despite this, Coinbase later gave FairShake another $25 million for the 2026 midterm elections.
“The stakes are too high to stand by, and that’s why we at Coinbase are proud to do our part,” the company said.
Such behavior by such a large industry player is inherently risky, and Coinbase's actions, which delegitimize the industry and resist efforts to regulate systemic problems, could expose the exchange and other companies to further scrutiny from regulators, lawmakers, and individual investors and customers, the report's authors say.
Cryptocurrency companies like Coinbase and Ripple have engaged in unprecedented levels of political spending in an attempt to influence regulation in their favor, but this strategy comes with significant reputational, legal, and financial risks, the report says. Investors and stakeholders should consider whether this behavior is consistent with responsible corporate governance and long-term financial stability, the authors say.
“History shows that industries that put short-term political gains ahead of transparency and compliance often face serious consequences, from regulatory crackdowns to eroded consumer confidence,” the analysts warned.
Источник: cryptocurrency.tech
