How tech bros bought âAmericaâs most pro-crypto Congress everâ
Published Sat, Nov 23 20248:52 AM EST
- Crypto execs, investors and evangelists saw the election as existential to an industry that spent the past four years simultaneously trying to grow up while being repeatedly beaten down.Â
- In total, crypto-related PACs and other groups tied to the industry reeled in over $245 million, according to Federal Election Commission data.
- Nearly 300 pro-crypto lawmakers will take seats in the House and Senate, according to Stand With Crypto, giving the sector unprecedented influence over the legislative agenda.
Bernie Moreno, Republican U.S. Senate candidate from Ohio, attends a campaign event in Holland, Ohio, on Saturday, October 26, 2024. Moreno is running against Sen. Sherrod Brown, D-Ohio.
Tom Williams | Cq-roll Call, Inc. | Getty Images
Prior to announcing his Senate candidacy in April 2023, Bernie Moreno was a political no name. A former car salesman in the Cleveland area, his only prior experience in politics was a losing bid for Ohioâs other Senate seat in 2022.
Moreno has since accomplished the once unthinkable.
On Nov. 5, as part of the election that swept Donald Trump back into the White House, Moreno defeated Democratic incumbent Senator Sherrod Brown, who was first elected to the House in 1992, before winning his Senate seat in 2006 and chairing the powerful Banking Committee since 2021.
Morenoâs rise from unsung Ohio businessman to prominent political leader was no accident. His campaign was backed by $40 million from the cryptocurrency industry as part of a highly targeted effort to get friendly candidates elected and, perhaps more importantly, its critics removed. Morenoâs victory was one of the Senate seats Republicans flipped to take control of the chamber.
In total, crypto-related PACs and other groups tied to the industry reeled in over $245 million, according to Federal Election Commission data. Crypto accounted for nearly half of all corporate dollars that flowed into the election, according to nonprofit watchdog Public Citizen. Advocacy group Stand With Crypto Alliance, which Coinbase launched last year, developed a grading system for House and Senate races across the country as a way to help determine where money should be spent.
Crypto execs, investors and evangelists saw the election as existential to an industry that spent the past four years simultaneously trying to grow up while being repeatedly beaten down. Nearly 300 pro-crypto lawmakers will take seats in the House and Senate, according to Stand With Crypto, giving the sector unprecedented influence over the legislative agenda.
The crypto political lobby worked so well this cycle because it made something complicated, like campaign finance, simple: Raise a ton of cash from a handful of donors and buy ad space in battleground states to either support candidates who back crypto or smear the candidates who donât. It also required thinking of candidates as a bit of a binary: They were either with the industry or against it.
Crypto companies and their executives mobilized rapidly, and they successfully figured out how to deploy their cash through a sophisticated ad machine across the country. They also took cues from what big tech got wrong. Rather than spending hundreds of millions of dollars on lobbying legislators post-election, the crypto industry invested in targeting their opponents ahead of the election so they wouldnât have to deal with them at all the next few years.
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For over a year, Moreno was grilled by Silicon Valley heavy hitters like Marc Andreessen, Ben Horowitz and David Sacks about blockchain technology, digital asset policy and the shifting terrain of global finance.
âThey didnât just jump in head first,â Moreno said, describing the scores of meetings that stretched back to his run in the primary. âWe had to build a lot of trust.â
Moreno also met with Coinbase co-founders Brian Armstrong and Fred Ehrsam as well as policy chief Faryar Shirzad. Armstrong and Ehrsam did not respond to CNBCâs request, through Coinbase, for comment about the meetings.
Coinbase is the largest digital asset exchange in the U.S. and has been battling the Securities and Exchange Commission in court for over a year. The company was the crypto kingmaker in the 2024 cycle, giving more than $75 million to a super PAC called Fairshake. It was one of the top spending committees of any industry this cycle and exclusively gave to pro-crypto candidates running for Congress. Fairshakeâs candidates won virtually every race that it funded in the general election.
âBeing anti-crypto is simply bad politics,â Coinbaseâs Armstrong wrote on X following Morenoâs victory.
As the price of bitcoin has multiplied by about sixfold in the past four years, SEC Chairman Gary Gensler has taken major crypto players like Coinbase and Ripple to court for allegedly selling unregistered securities and has avoided working with companies to develop new specialized regulations.
Meanwhile, Sen. Brown sided with the expressly anti-crypto Sen. Elizabeth Warren, D-Mass., in targeting crypto for allegedly funding terrorist organizations, including Hamas. Brown became more vocal in calling for crackdowns of the industry after the failure of crypto exchange FTX in late 2022.
As FTX was spiraling into bankruptcy, Brown on Nov. 10 retweeted a post from the Senate Banking Committee calling the event âa loud warning bell that cryptocurrencies can failâ and can âhave a ripple effect on consumers and other parts of our financial system.â
The bipartisan Fairshake won all but three races in the general election, spending big on Republicans and Democrats gunning for key seats. Protect Progress, a PAC affiliated with Fairshake, gave more than $10 million apiece to Democratic candidates for the Senate in Arizona and Michigan. Both won. Defend American Jobs, another one of Fairshakeâs affiliated PACs, spent more than $3 million to support Republican Jim Justice in West Virginia, who will take the former seat of Democratic Sen. Joe Manchin when the new session gets underway in 2025.
In California, Democratic Rep. Katie Porter lost a Senate primary after Fairshake spent more than $10 million on ads against her.
âI was, like, âWhat the heck is Fairshake?ââ Porter told The New Yorker.
How tech bros made their pick
Those vetting Moreno wanted to understand what he would do differently than the current administration and regulatory regime, the senator-elect told CNBC in an interview.
âThese are people who know how to vet investments, know how to vet people and they took that same disciplineâ with me, Moreno said.
It helped that heâd built a blockchain startup, a company called Champ Titles that digitizes automobile ticketing and registration.
âWhat they didnât want was to put time, effort and energy behind somebody who, at the end, would be a disappointment,â Moreno said.
A spokesperson for Andreessen and Horowitz, who are co-founders of a venture firm bearing their names, declined to comment. Sacks, founder of Craft Ventures, didnât respond to CNBCâs request for an interview.
Coinbaseâs Shirzad met Moreno over breakfast in Washington in the spring. Moreno wasnât an expert on the details of the policy issues heâd be pursuing but had a clear understanding of crypto technology and how it could be applied, Shirzad told CNBC in an interview.
âIt was a really great meeting of minds between me as a policy guy and him as kind of a business guy that saw the potential of the technology,â Shirzad said.
Moreno was out of cash after spending all he had on a tough and expensive primary, said David McIntosh, an early backer of Morenoâs Senate bid and president of the Club for Growth, a conservative organization that focuses on American economic issues. Fairshake played a crucial role for Morenoâs campaign starting in the summer, McIntosh said.
Morenoâs victory over Brown âsent a really strong signal to Washington that the voters are going to support candidates who are pro-blockchain,â McIntosh said.
McIntosh noted that the Club for Growth spent $6.5 million to help Moreno with advertising in the primary through its different super PACs, including the Bitcoin Freedom Fund.
Brownâs office didnât respond to multiple requests for comment.
Brown told Politico he hasnât ruled out running for Vice President-elect JD Vanceâs open Senate seat in Ohio, which will be filled by special election in 2026.
Moreno benefited from branding himself as the âchangeâ candidate while Brown âbecame a defender of the status quo,â Shirzad said.
âCrypto thematically is a change issue,â Shirzad said. âIt appeals to not only a younger demographic, but it also appeals to voters who want to change.â
Fairshake declined to comment on whether it would spend to block another Brown Senate run, but the super PAC has already raised $78 million for the 2026 midterms.
âWe stuck to our core strategy from Day 1, supported pro-crypto candidates and opposed those who played politics with jobs and innovation, and won,â Fairshake told CNBC in a statement.
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âMost pro-crypto Congress everâ
The past two election cycles featured spending from the now-bankrupt crypto exchange FTX and its founder Sam Bankman-Fried, who was sentenced to 25 years in prison in March for stealing more than $8 billion worth of customer money through FTX.
This yearâs contributor list was more robust but saw large sums of funding come from companies that have been at odds with SEC Chair Gensler for years. That includes Coinbase and blockchain giant Ripple Labs. Prominent venture fund Andreessen Horowitz, which has a large portfolio of crypto companies, was one of the other primary contributors.
A lot of cryptoâs big names also gave significantly in 2024.
FEC filings show Cameron and Tyler Winklevoss were among the largest individual crypto donors this election cycle, giving a combined $10.1 million. Top executives from Ripple contributed millions, led by billionaire founder Chris Larsen, who gave around $12 million this cycle.
Coinbase CEO Armstrong gave over $1.3 million to a mix of PACs including Fairshake and JD Vance for Senate Inc. He also gave directly to Democrats and Republicans running for House and Senate seats. Coinbase Chief Legal Officer Paul Grewal attended at least two Trump fundraisers, including one in Nashville, Tennessee, on the sidelines of the biggest bitcoin event of the year.
Kraken Chairman Jesse Powell donated over $1 million to the Trump campaign.
Other individual crypto contributors include ex-Bitfinex strategy chief Phil Potter (over $1.6 million), Multicoin Capitalâs Kyle Samani ($878,600), Paradigm co-founder Fred Ehrsam ($735,400), Union Square Ventures partner Fred Wilson ($1,4 million), Paxos CEO Charles Cascarilla ($198,500), BitGo CEO Mike Belshe ($119,825), Solana co-founder Anatoly Yakovenko ($67,100), and Xapo Bank founder Wences Casares ($374,899).
This week, Armstrong reportedly met with the president-elect to discuss appointments. Within a day, conversations swirled about the potential for the White Houseâs first crypto czar. By the end of the week, SEC Chair and longtime crypto foe Gensler, whose term doesnât expire until June 2026, announced he was retiring on inauguration day.
One of Trumpâs promises to his crypto fans on the campaign was that he would fire the SEC head and choose crypto-friendly regulators if elected. Gensler may have taken a look at the pressure that faces him across Washington and decided it just wasnât worth trying to stick it out.
âWelcome to Americaâs most pro-crypto Congress ever,â Armstrong wrote on X on Nov. 5.
Coinbaseâs legal chief: âWe are going to have the most pro-crypto Congress everâ