Crypto industry leaders have quickly made their way onto the list of top individual OpenSecrets donors this election cycle. This is a major shift in the landscape of political donations that highlights how crypto executives are making big money, fast, and are willing to spend on political influence.
FTX, the Bahamas-based cryptocurrency exchange founded and run by billionaire investor Sam Bankman-Fried, has positioned itself as a leader in the battle for influence.
New analysis by OpenSecrets found that three FTX executives have contributed nearly $26 million this election cycle as of March 31, a marked increase from $7 million in the 2020 election cycle. But the total is likely closer to $40 million based on FEC disclosures filed since March 31, including a $10 million donation from Bankman-Fried to protect our future PAC and a $3 million donation from the co-CEO Ryan Salame at his own super PAC, American Dream Federal Action.
While FTX didn’t respond to OpenSecrets’ request for comment, Bankman-Fried publicly announced plans to donate “north of $100 million” with a “soft cap” of $1 billion. dollars during the 2024 election cycle, which could make him the largest individual donor. ever in an American election. Sheldon Adelson, the late Las Vegas sands mogul, holds that title. It paid $215 million to outside groups and $3 million to candidates in the 2020 election.
Bankman-Fried has presented his political donations as an altruistic endeavor, but as The American Prospect reported on Monday, the young leader has spent the past year crafting a pro-crypto political agenda backed by massive political contributions. Crypto industry executives have already started pumping money into the 2022 midterm elections as the executive and legislative branches consider avenues for crypto regulation.
Washington weighs digital asset regulations
Lawmakers introduced 35 bills related to cryptocurrency, blockchain technology and a central bank digital currency in 2021, and Congress introduced a record 50 bills in 2022 that would further shape the landscape crypto and blockchain.
President Joe Biden also issued a long-awaited crypto executive order in March. The order, which has been generally well received by the industry, sets out the administration’s policy priorities and directs several agencies to issue reports on topics including crypto regulation, environmental concerns of digital currencies, and environmental concerns. exploring options for issuing central bank digital currencies.
While the executive order is not binding unless Congress acts, it nonetheless indicates that the federal government is interested in creating policy around cryptocurrency.
But a group of 26 renowned tech experts, including Harvard lecturer Bruce Schneier and Google Cloud principal engineer Kelsey Hightower, sent a letter to Congress “in support of responsible fintech policy” last Tuesday. The letter warned that cryptocurrency is not as “unqualified good” as industry officials claim and urged lawmakers to critically assess industry claims as Congress weighs the federal regulations.
“We strongly disagree with the narrative – peddled by those with a financial stake in the crypto-asset industry – that these technologies represent positive financial innovation and are in no way suited to solving the financial problems facing ordinary Americans,” the experts wrote.
The crypto industry made headlines for its lobbying efforts against the Senate infrastructure bill last August, and Bloomberg recently highlighted a 5,200% increase in political donations from crypto executives. so far in this election cycle. Much of this money comes from industry executives who have little or no record of political contributions.
Crypto is “here to stay”
In a January statement on a new pro-crypto super PAC, CMS Holdings co-founder Daniel Matuszewski said, “GMI PAC is the campaign arm of the crypto community and we’re here to stay.”
Matuszewski was among the founding donors of GMI PAC, created last fall to support candidates who support a “more secure, competitive and innovative digital marketplace.” Matuszewski now sits on the super PAC’s board, according to POLITICO, and he donated $725,000 in fall 2021.
Bankman-Fried gave $2 million to GMI PAC, and FTX co-CEO Salame contributed an additional $1 million. Other big names in the crypto industry donated to the super PAC’s $7.4 million vault, including CEO Phil Potter of crypto exchange Bitfinex, who contributed $1 million.
But Bankman-Fried’s biggest contribution by far has been to another new super PAC, Protect Our Future PAC, which has spent $17 million so far this cycle to help elect Democratic candidates with a “forward vision.” long-term policy planning”.
FTX executives have paid out $24 million of the $24.1 million raised by the super PAC so far this round. Bankman-Fried has donated $23 million so far this cycle. He initially contributed $13 million through Nevada-based fintech Prime Trust LLC, plus an additional $1 million from engineering director Nishad Singh, and Bankman-Fried and Singh didn’t identify themselves as donors until after POLITICO issues.
Bankman-Fried has repeatedly said that the super PAC is about electing leaders who will prevent future pandemics, but most of the Protect Our Future PAC money spent so far this round has gone to boosting a friend of the family, Carrick Flynn, who lost in a landslide to state Rep. Andrea Salinas (D) in the U.S. House Democratic primary in Oregon on May 17.
The super PAC alone spent $11.4 million on the Democratic primary in Oregon’s new 6th congressional district race. Protect Our Future PAC spent $10.5 million to boost Flynn and $940,000 against Salinas.
Bankman-Fried also gave $6 million to the House Majority PAC affiliated with House Majority Leader Nancy Pelosi (D – Calif.) in April, which spent an additional $940,000 to boost Flynn. Salinas ultimately beat Flynn despite the outside spending flurry and the fact that Flynn topped her by $270,000 heading into the primary.
The FTX CEO also directly contributed $2,900 to Flynn’s campaign.
Why Protect Our Future PAC and House Majority PAC poured so much money into Oregon, and especially behind Flynn, is not entirely clear. The Willamette Weekly reported that although Bankman-Fried has been registered to vote in Oregon since he was 18, he has voted only twice in 30 elections. He also missed the 2020 general election. Flynn also told Slate that he was close with Bankman-Fried’s brother, Gabe. Gabe is said to have worked closely with the head of crypto on his philanthropic efforts.
In addition to his $1 million contribution to Protect Our Future PAC, Singh donated $1 million to Mind The Gap, a left-leaning super PAC created by Stanford scholars known to get most of his funding. of Silicon Valley. Prior to 2020, Singh had made just one donation of $2,700.
Salame leads conservative crypto contributions
Salame has donated $3.7 million to super PACs since the end of March. Most of that money went to American Dream Federal Action, a super PAC he launched in April 2022. American Dream Federal Action aims to support “forward-looking Republican candidates who want to protect economic and national security. America’s long term,” including cryptocurrency.
The American Dream’s $4 million war chest comes from two contributions of $1 million and $3 million that Salame made in late March and early April, respectively. American Dream Federal Action has paid $2 million into congressional primaries over the past two months, according to FEC filings.
The super PAC has spent more than $1.2 million supporting former USDA official Brad Finstad, who won the special GOP primary in Minnesota’s 1st congressional district last Tuesday. The super PAC also spent $300,000 against another GOP special lead candidate, State Rep. Jeremy Munson (R), who was backed by the House Freedom Caucus.
Sen. John Boozman (R-Ark.) also got a $1.2 million boost from the American Dream Federal Action. Bankman-Fried contributed $5,800 to Boozman’s campaign, $2,900 each for primary and general election campaigns. Boozman won the Arkansas GOP primary last Tuesday, and he will face Democratic primary winner Natalie James and Libertarian Kenneth Cates in November’s general election.
A senior member of the Senate Agriculture Committee, Boozman criticized new regulations on digital assets such as cryptocurrency during a hearing in February. Boozman was one of 12 recipients of a letter to Congress from tech experts urging lawmakers to critically assess the claims of the crypto industry.
Salame also contributed $500,000 to Results for NC, also known as Grow NC Strong, which according to OpenSecrets has already donated $1.5 million to unseat Rep. Madison Cawthorn (R-NC).