Crypto industry leaders have quickly spent their way onto OpenSecrets’ top individual donor list this election cycle. It’s a major shift in the political giving landscape that highlights how crypto executives are earning a lot of money, fast, and that they’re willing to spend on political influence.
FTX, the Bahamas-based cryptocurrency exchange platform founded and helmed by billionaire investor Sam Bankman-Fried, has positioned itself as a leader in the influence battle.
A new OpenSecrets analysis found three executives at FTX contributed almost $26 million this election cycle as of March 31, a marked increase from $7 million during 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 co-CEO Ryan Salame to his own super PAC, American Dream Federal Action.
While FTX did not respond to OpenSecrets’ request for comment, Bankman-Fried has publicly announced his intent to donate “north of $100 million” with a $1 billion “soft ceiling” during the 2024 election cycle, which could make him the largest individual donor ever in a U.S. election. Sheldon Adelson, the late Las Vegas Sands mogul, holds that title. He contributed $215 million to outside groups and $3 million to candidates during the 2020 election.
Bankman-Fried has cast his political donations as an altruistic endeavor, but as The American Prospect reported Monday, the young executive has spent the last year building out a pro-crypto policy agenda underpinned by massive political contributions. Crypto industry executives have already started to pour cash into the 2022 midterm elections as the executive and legislative branches eye avenues for crypto regulation.
Washington weighs regulations for digital assets
Lawmakers introduced 35 bills related to cryptocurrency, blockchain technology and a central bank digital currency in 2021, and Congress has introduced a record 50 bills in 2022 that would further shape the crypto and blockchain landscape.
President Joe Biden also issued a highly-anticipated executive order about crypto in March. The order, which was generally well-received by the industry, lays out the administration’s policy priorities and instructs several agencies to release reports on topics including crypto regulations, environmental concerns of digital currencies and exploring options to issue central bank digital currencies.
While the executive order is nonbinding unless Congress takes action, it nevertheless indicates the federal government is interested in creating policy around cryptocurrency.
But a group of 26 renowned technology 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 “unreservedly good” as industry officials claim and urged lawmakers to critically assess industry claims as Congress weighs federal regulations.
“We strongly disagree with the narrative—peddled by those with a financial stake in the crypto-asset industry—that these technologies represent a positive financial innovation and are in any 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’s infrastructure bill last August, and Bloomberg recently highlighted a 5,200% increase in political giving by crypto executives so far this election cycle. Much of that money is pouring in from industry executives who have little-to-no prior history of making political contributions.
Crypto is “here to stay”
In a January statement about a new pro-crypto super PAC, CMS Holdings co-founder Daniel Matuszewski said, “GMI PAC is the crypto community’s campaign arm and we are here to stay.”
Matuszewski was among the founding donors to GMI PAC, created last fall to back candidates who support a “more secure, competitive, and innovative digital marketplace.” Matuszewski now serves on the super PAC’s board of directors, according to POLITICO, and he contributed $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 have given to the super PAC’s $7.4 million coffer, including the CEO Phil Potter of the crypto exchange platform Bitfinex, who contributed $1 million.
But Bankman-Fried’s largest 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 “long term view on policy planning.”
FTX executives contributed $24 million of the $24.1 million raised by the super PAC so far this cycle. Bankman-Fried has donated $23 million so far this cycle. He initially contributed $13 million through Nevada-based fintech Prime Trust LLC along with an additional $1 million from Director of Engineering Nishad Singh, and Bankman-Fried and Singh only identified themselves as the donors after questions from POLITICO.
Bankman-Fried has said repeatedly the super PAC aims to elect leaders who would prevent future pandemics, but most of the Protect Our Future PAC money spent so far this cycle went to boost a family friend, 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 spent $11.4 million alone in the Democratic primary in Oregon’s newly formed 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 bested Flynn despite the wave of outside spending and the fact that Flynn outraised her by $270,000 ahead of 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 specifically behind Flynn, is not entirely clear. The Willamette Weekly reported that while Bankman-Fried has been registered to vote in Oregon since he was 18, he has only voted twice in 30 elections. He also sat out the 2020 general election. Flynn also told Slate he is close to Bankman-Fried’s brother, Gabe. Gabe reportedly works closely with the crypto executive on his philanthropic endeavors.
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 academics known for getting most of its funding from Silicon Valley. Before 2020, Singh had only made one donation of $2,700.
Salame leads in conservative crypto contributions
Salame has given $3.7 million to super PACs since the end of March. Most of that 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 America’s long-term economic and national security,” including cryptocurrency.
All $4 million in the American Dream’s war chest are from two contributions of $1 million and $3 million that Salame made in late March and early April respectively. American Dream Federal Action has poured $2 million into Congressional primaries in the last two months, according to FEC filings.
The super PAC spent more than $1.2 million to support 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 special GOP primary contender, state Rep. Jeremy Munson (R), who was backed by the House Freedom Caucus.
Sen. John Boozman (R–Ark.) also enjoyed a $1.2 million boost from American Dream Federal Action. Bankman-Fried contributed $5,800 to Boozman’s campaign, $2,900 each for the 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 the November general election.
A ranking member on the Senate Agriculture Committee, Boozman was critical of new regulations on digital assets such as cryptocurrency during a February hearing. Boozman was one of the 12 recipients of a letter to Congress from technology experts urging lawmakers to critically assess crypto industry claims.
Salame also contributed $500,000 to Results for NC, also known as Grow NC Strong, which OpenSecrets previously reported poured $1.5 million into unseating Rep. Madison Cawthorn (R–N.C.).
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