Crypto super PAC notches wins in House, Senate races

WASHINGTON — A super PAC bankrolled by top crypto companies notched several wins Tuesday night in congressional primaries, the latest in a series of victories by the newest big player in American election financing.

Fairshake PAC, which supports candidates across the political spectrum whose positions align with the crypto industry’s, will enter the general election campaign season with more than $100 million that it plans to spend to elect pro-crypto lawmakers to the House and Senate.

On Tuesday night, Rep. Jamaal Bowman, D-N.Y., lost his primary to Westchester County Executive George Latimer. Bowman’s loss was due in part to his vocal criticisms of Israel. Yet crypto’s Fairshake PAC also got into the race and spent $2 million to air an ad critical of Bowman.

Fairshake and its two affiliated PACS, one for Republicans, one for Democrats, quietly racked up half a dozen other wins on Tuesday as the candidates they backed glided to victory, although none of the races were competitive. They included Rep. John Curtis, who won the Republican nomination for Utah’s open Senate seat.

Created last year as part of a joint effort between more than a dozen crypto firms, Fairshake PAC has emerged as one of the top spending political actions committees in the 2024 election cycle.

Fairshake and its two affiliated PACs have put more than $37 million so far into advertisements in primary races, according to AdImpact.

Despite a broad mission to defend the entire $2.2 trillion crypto market, Fairshake is funded by a very small set of donors.

Of the $160 million in total contributions Fairshake has raised since it was founded, around $155 million — or 94% — can be traced back to just four companies: Ripple, Andreesen Horowitz, Coinbase and Jump Crypto.

But it’s not just money that the crypto industry plans to deploy this fall. The non-profit Stand With Crypto says it has collected more than 1.1 million email addresses of crypto “advocates,” that it hopes to engage all the way to the ballot box.

The strength of the crypto groups is getting noticed on Capitol Hill, especially among lawmakers who are facing tough elections next year, where a few thousand voters, or a hefty donation, could make a difference in not only a race but in which party controls each chamber.  

Ripple CEO Brad Garlinghouse said this is a “defining moment” for crypto and it’s made a difference to have an “organized, cohesive effort around Fairshake.”

“This is an industry that has been behind in Washington and really has been on the defensive,” Garlinghouse told CNBC.

The effort is also meant to showcase a matured crypto industry. After the rise and fall of Sam Bankman-Fried, who poured millions in the 2022 midterms, crypto groups are presenting themselves as more serious players.

Coinbase Chief Policy Officer Faryar Shirzad, who worked at both the White House and Goldman Sachs, said the industry has realized the need to not only engage lawmakers, but also coordinate with crypto and blockchain owners to magnify their political clout.

“We made a funny realization, which was that the only way we were going to get the politics out of crypto was to bring build a political operation that leveled the playing field.”

He also said the group is tapping into what he sees as a grassroots movement in order to let “Americans who own crypto to be a part of the process.”

In the coming months, the group doesn’t plan to spend on the presidential race, but rather the House and Senate – both which are in play for next year.

Fairshake has yet to start spending in the general election cycle, but several officials in the industry said they are keeping an eye on states like Ohio and Montana, where Democratic incumbents who are bearish on crypto face challengers who have embraced the technology.  

In Ohio, Senate Banking Committee Chair Sherrod Brown, an outspoken crypto skeptic, is facing off against Republican Bernie Moreno, who founded a blockchain startup.

In Montana, Republican challenger Tim Sheehy has called crypto “the future of finance and the internet.” Meanwhile, Democratic incumbent Sen. Jon Tester told “Meet the Press” in 2022 that crypto did not “pass the smell test.” He reportedly also called crypto “bull****” according to Semafor.

But as Tester wages one of the toughest reelection fights in the Senate, his attitude towards crypto appears to be shifting.

Tester told reporters that he is keeping an open mind about several crypto bills before the Senate.

“It’s 21^st century stuff,” Tester told reporters June 12 in the Capitol. “I thought fax machines were B.S. too.”

That shifting mindset has also shown up in votes. Tester was one of 11 Democrats to vote to overturn SEC guidance on crypto that was criticized by the industry.

Democratic Sens. Bob Casey of Pennsylvania and Jackie Rosen of Nevada, who also face tough reelection battles, voted for the bill.

In the House, Rep. Elisa Slotkin, D-Mich., who is running for an open Senate seat, voted both for overturning the SEC guidance and another bill to set up a market structure for digital assets.

Yet, it remains to be seen how big of a role crypto will play in November’s elections, and how many votes will ultimately be influenced by any candidates’ positions on crypto.

An annual survey released in May by the Federal Reserve found that around 7% of Americans have either owned or used crypto in the past year, or roughly 18 million adults. That figure is five percentage points lower than the same survey reported in 2021.

Issues like the economy, immigration and abortion impact more people, on an order of magnitude, than crypto does. Indeed, the relatively small pool of crypto users is something the industry’s political ad makers appear to be cognizant about.

Ads funded by Fairshake deliver messages that are typically less about a candidates’ support for or opposition to crypto, and more about broader issues that resound with voters, such as fairness and integrity.

During the California primary season, a Fairshake ad targeted Rep. Katie Porter, D-Calif., as a “fake” and sought to tie her to a corrupt company. Fairshake spent $9.7 million on the race.

Porter ultimately lost to Rep. Adam Schiff, D-Calif., who is widely considered to be friendlier to crypto than Porter.