WASHINGTON — During the first years after the creation CoinbaseCEO Brian Armstrong avoided Washington, D.C. But as his ambitions for his crypto exchange grew, so did his need to curry favor on Capitol Hill.
“About five or six years ago, we realized that crypto was becoming big enough that we really needed to actively engage in a policy effort, so I started coming to Washington,” said Armstrong, who launched Coinbase in 2012, at CNBC in September. , at the end of a day of meetings with political leaders.
Today, it’s practically Armstrong’s full-time job, and Coinbase money is all over the nation’s capital. The company has been one of the top corporate donors this election cycle, giving more than $75 million to a group called Fairshake and its affiliated PACs, including a new pledge of $25 million to support the pro-super PAC. crypto in the 2026 midterms. Armstrong has personally contributed more than $1.3 million to a mix of candidates up and down the ballot.
The tech industry’s biggest names have been dotting Washington for years trying to advance their agendas as their market caps grow, but for Coinbase the question is potentially existential.
SEC Chairman Gary Gensler sued the company last year over allegations that it sold unregistered securities. A judge has since ruled that the case should be heard by a jury. Coinbase fought back vehemently and also said it wanted to work with regulators to come up with a proper set of laws governing the nascent industry.
Meanwhile, Coinbase faces a growing list of competitors.
In the company’s latest quarterly earnings report last week, Coinbase missed its results due to lower transaction revenue and a decline in subscription and services revenue. Shares fell 15%.
Data from CCData shows the exchange is losing spot market share to industry competitors like Crypto.com. And investors have many new options for accessing Bitcoin and Ethereum since the SEC green light this year. BlackRock ETF head Samara Cohen told CNBC that 75% of her bitcoin buyers are crypto investors who are new to Wall Street.
Washington can’t save Coinbase from competition, but the company is betting that with supportive lawmakers in place, it can become the leader of a thriving industry rather than under the constant threat of lawsuits and notices from Wells.
Armstrong said his visits to Washington normally occur once or twice a year. Then it had to be at least a quarterly occasion. And the pace has only increased.
“At first, a lot of people didn’t know what cryptography was,” Armstrong said of his previous travels. Today, “the discussion has really progressed on the question of how do we adopt clear rules and create legislation in the United States?”
An SEC without President Gensler
Paul Grewal, Coinbase’s chief legal officer, attended a fundraiser in San Francisco in June. raised $12 million for former President Donald Trump. The event was organized by venture capitalist David Sacks, a former Trump critic who became a staunch supporter when he became the Republican nominee.
Grewal then joined a fundraiser in Nashville in July for the former president.
Trump has never shown much aptitude for the nuances of crypto, but he has welcomed financial support from the industry. He was applauded in the summer, when he vowed to fire Gensler at the head of the SEC if he wins.
Grewal told CNBC that he had “many conversations” behind closed doors with the Trump camp as well as Democratic Vice President Kamala Harris’ campaign. As Election Day approached on Tuesday, the candidates were virtually at an impasse.
“What I think we’re hearing from both campaigns is that they get it,” Grewal said. “They understand that, in swing state after swing state, there are enough voters who care about crypto that the candidate and his campaigns must express the concerns of those voters by supporting reasonable rules for crypto, sensible legislation coming out of Congress and that’s very encouraging.”
Grewal said Trump “came to this pro-crypto view earlier,” but said Harris recognizes the need for “an agenda focused on promoting sensible rules for crypto as much as any other technology.” .
But Coinbase’s political interests as an organization have focused exclusively on congressional races, as the company seeks to help bring together a group of lawmakers with favorable views on the industry.
THE Support the Crypto Alliancelaunched by Coinbase last year, has developed a rating system for House and Senate candidates across the country.
In the Ohio Senate race, for example, the organization gives incumbent Democratic Sen. Sherrod Brown, who chairs the Banking Committee, an “F” grade, compared to an “A” grade for his Republican rival Bernie Moreno, a blockchain entrepreneur. Some $40 million in cryptocurrency was devoted to defeating Brown, and a PAC paid for five ads designed to increase Moreno’s notoriety. The race is very close and crucial in determining which party will control the Senate.
Stand with Crypto, which has recruited 1.4 million advocates across the country, is also working to mobilize digital asset owners living in swing states. This effort involved a cross-country bus tour through the battlefields, aiming to get these residents registered to vote.
“It’s truly extraordinary, given how slim the margin of victory was in the 2020 election, to see crypto not just be an issue, but potentially a defining issue in terms of the presidential cycle,” Faryar Shirzad, director Coinbase policy, said in an interview.
Shirzad said that last year he and his team concluded that the only way to get politics out of crypto was to “build our own political operation.” He said the aim was to “neutralize the politicization of the crypto issue and discuss it on the merits.”
Coinbase is far from alone. Nearly half of all funds raised by companies in these elections come from crypto companies.
Fairshake, one of the biggest spending PACs this cycle, told CNBC that it raised about $170 million this election and disbursed about $135 million.
Ripple Labs is another of Fairshake’s major political donors.
The company, which spent more than $100 million fighting Gensler, gave about $50 million to Fairshake. Several leaders also contributed to a mix of Democratic and Republican candidates in elections across the country.
Ripple’s head of U.S. public policy, Lauren Belive, told CNBC at a fintech conference in Las Vegas that the company was motivated by the SEC’s overreach.
“We really wanted to appoint people who could learn about this technology and understand it, because we need Congress to act and create federal laws and not have this enforcement regime,” Belive said. She added that the regulator had launched more than 100 enforcement actions against crypto-aligned companies.
The crypto voter
The Stand with Crypto bus tour culminated with a rally held at the Black Cat in Washington on a Wednesday evening in September.
The popular concert hall has no windows and gives off an “Alice in Wonderland” vibe, with its mix of purple-painted walls and exposed brick, as well as its black-and-white checkerboard floor.
As music blared and drinks flowed, free “Stand with Crypto” merchandise was distributed to attendees. Excess goody bags were generously distributed to those looking to take extras home.
Armstrong got out of his black SUV to speak to CNBC just outside the venue. He wore a suit and tie, which stood in stark contrast to his fellow attendees. Armstrong said he was confident about the upcoming election.
“The crypto voter has now become a major part of this election,” Armstrong said. “I think the crypto voter is really real, and we’ll see what happens in November.”
In addition to Armstrong, Consensys CEO Joe Lubin and Rep. Wiley Nickel (D-N.C.) spoke at the rally. Most of the remarks were inaudible over the roaring hum of the crowd.
Silence fell over the audience when the headline band, The Chainsmokers, took the stage. The band opened with their 2017 classic “Paris,” and the crowd sang back the chorus: “If we go down, then we go down together.” »
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