As the US election season kicks off, the crypto industry is gearing up for a political fight with a new weapon: a super PAC funded by Coinbase and its CEO Brian Armstrong. The Fairshake PAC, which aims to support pro-crypto candidates from both parties, has raised $85 million so far, with about one-third coming from Armstrong and his company.
Coinbase, the largest US crypto exchange, is facing a legal challenge from the Securities and Exchange Commission (SEC), which accused it of operating an unregistered securities exchange, broker-dealer, and clearinghouse for certain tokens last year. Coinbase has denied the charges and argued that the SEC is overreaching its authority.
The SEC’s crackdown on crypto intensified when it sued several prominent players in the industry, including FTX, Voyager, and Genesis. Some of them have settled with the regulator, while others are still fighting in court. Coinbase, however, has refused to back down and has vowed to defend its business and the crypto community.
FTX, Voyager, Genesis went down — many of Coinbase’s peers actually went down, […] Coinbase is still standing and fighting for the industry. He needs to get this done, said Owen Lau, analyst at Oppenheimer & Co.
Armstrong has emerged as one of the most influential and affluent leaders in the crypto space. His net worth soared to an estimated $5.8 billion last year, thanks to the rebound in Coinbase’s stock price, which increased by about 300% from the beginning of 2023, according to the Bloomberg Billionaires Index. He also sold $78 million worth of shares in the company last year, according to data from InsiderInsights.com.
Armstrong has used some of his wealth to support the crypto cause, donating $1 million to the Fairshake PAC and convincing Coinbase to contribute another $24.5 million. He has also hired former UK Chancellor George Osborne as an advisor and launched a crypto advocacy group called Crypto Council for Innovation.
Coinbase-backed Fairshake’s Political Impact
Fairshake describes itself as “the first super-PAC dedicated to advancing the crypto economy and protecting the rights of crypto users.” The PAC’s strategy is to leverage the “crypto’s superpower of grassroots support” and spend big to elect crypto-friendly lawmakers and defeat crypto-hostile ones. It also plans to educate voters and policymakers about the benefits of crypto and the risks of overregulation.
So far, the PAC has spent more than $10 million on various candidates and causes, according to data from OpenSecrets. Its biggest beneficiary has been Representative Patrick McHenry, a North Carolina Republican and a vocal supporter of crypto, who received $4.5 million from the PAC. McHenry has announced that he will not run for re-election in 2024.
Other recipients of Fairshake’s funds include Representatives Dusty Johnson, a South Dakota Republican; Josh Gottheimer, a New Jersey Democrat; and Tom Emmer, a Minnesota Republican, who are all members of the Congressional Blockchain Caucus. The PAC has also donated to several state and local candidates and initiatives that are aligned with its mission.
Moreover, the political landscape is fluid and unpredictable, and the crypto community is not monolithic or unified on every issue. Therefore, the outcome of the 2024 election and the role of the Fairshake PAC remain to be seen. But one thing is clear: Coinbase and its CEO are not afraid to take a stand and make a difference for crypto.
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