Crypto sector increases political contributions amid worsening sentiments in Washington
TL/DR –
Crypto firms such as Coinbase, Circle, and a16z have increased their political donations as they face increasing resistance from US politicians. These companies are supporting pro-crypto legislators and seeking to influence pending legislation in the leadup to the 2024 presidential elections. The contentious climate in Washington has been fueled by criticisms from lawmakers like Senator Elizabeth Warren, who has called for tougher regulations on crypto due to its alleged national security risks.
Crypto Firms Increase Donations to Influence US Political Landscape
US crypto companies like Coinbase, Circle, and a16z, are upping their political donations in an effort to elect pro-crypto legislators. They’re being backed by illustrious investors such as Ron Conway, Fred Wilson, and the Winklevoss twins.
This week, these companies channeled $78mn into Fairshake, a federal super Pac promoting pro-crypto leadership, marking an escalation of their previous minimal political spending.
“We aim to depoliticise crypto,” stated Faryar Shirzad of Coinbase. “Our lobbying and grassroots work, including Fairshake, will foster more public debate on crypto’s social merits, bypassing politicisation.”
However, Washington is increasingly swayed by crypto critics, including Democratic senator Elizabeth Warren. She recently rallied over 100 lawmakers to urge the White House and Treasury to crackdown on illicit crypto activity.
“Digital assets risk national security,” Warren told the Financial Times. “The lack of crypto regulation is a magnet for criminals.”
Anti-crypto sentiment grew following former FTX chief executive Sam Bankman-Fried‘s fraud arrest and Binance’s confession of inability to prevent money laundering.
Fairshake’s creation partly arose from Congress’s inability to enact a clear crypto regulatory framework. However, they continue to seek allies as another political period in Washington concludes.
Last December, Warren proposed a bill designed to impose anti-laundering obligations on the crypto industry similar to the rest of the finance world. Republican co-sponsor Senator Roger Marshall defended the bill, saying, “We’re holding crypto to the same standards as banks.”
“If Democrats win the presidential election and command Congress as well, there will certainly be bigger regulatory challenges,” warned Orlando Cosme, a law firm founder.
“This increased lobbying effort seems to be aimed at impacting the election more than responding to recent enforcement actions and court cases,” he added.
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