Hello and welcome to the latest edition of the FT’s Cryptofinance newsletter. This week we’re revisiting crypto politics in Washington DC.
If you have read the Blockchain Association’s letter to members of Congress this week, you might be tempted to think the crypto industry was a reluctant participant in the world of politics.
The letter’s 80 signatories, who included Coinbase chief policy officer Faryar Shirzad and Andreessen Horowitz’s Michele Korver, were turning their fire on a crypto-focused money laundering bill co-sponsored by staunch industry critic Senator Elizabeth Warren (D-MA), claiming it imperils thousands of jobs and poses a risk to the US’s future.
“We again raise our voice, not to inject ourselves needlessly into a political world that is new to many of us, but to stand up for what our experience tells us is right,” the letter reads.
Whether or not it is standing up for what is right is for you to judge, but the one thing the letter does show is how the industry is throwing its weight around in the corridors of power in Washington DC, and doing so more openly than ever before.
This week super political action committee Fairshake — which could in theory put any amount of money it wants to work during campaign seasons and which is backed by crypto firms such as Coinbase — launched a multimillion dollar media campaign against Representative Katie Porter (D-Calif), who is running for the US Senate.
Porter’s name is not normally the first that springs to mind when one thinks of crypto’s biggest opponents: attention may instead turn to Warren or Securities and Exchange Commission chair Gary Gensler. But Porter — seen as Warren’s protégé by insiders — has long been a critic.
In 2022 Porter co-signed a letter to some of the world’s largest bitcoin mining companies, seeking information about their operations and sharply criticising the mining sector’s poor environmental record.
“Given the extraordinarily high energy usage and carbon emissions associated with bitcoin mining, mining operations raise concerns about their impacts on the global environment,” the letters read.
Fairshake evidently believes she poses enough of a threat to the industry.
“California voters deserve to know the truth about Katie Porter’s record,” the super Pac said in a statement accompanying the launch of the media campaign. “Porter has taken campaign cash from the big banks, big pharma and big oil and her super pac is spending big to mislead Californians,” Fairshake claimed, adding it is standing up for jobs and innovation in the Golden State.
Porter’s office did not respond to a request for comment.
It is the first major campaign Fairshake has embarked on since December, when the industry’s biggest hitters pooled their funds through the group to supercharge their political influence ahead of a big year for American politics.
Then, Fairshake’s stated aim was to support “pro-crypto leadership”, which in theory doesn’t have to become a partisan issue, but the group is now turning its attention to the industry’s naysayers.
“This stuff has been going on behind the scenes for years, but it is definitely more visible now,” Hilary Allen, professor of law at American University in Washington DC, told me. “The strategy has changed from trying to influence lawmakers to demonising crypto sceptics, and it’s clear that was always going to be the play.”
It’s the clearest statement of intent yet from the growing crypto lobby ahead of November’s presidential election. The media campaign against Porter also shows the group has made a conscious decision to go after its targets without focusing specifically on crypto in its attacks.
“Fairshake are doing the right thing by attacking Porter on the big issues like campaign financing,” one person familiar with the group’s strategy and leadership told me.
“That’s how you know this ad campaign is legit. Nobody cares about crypto, it doesn’t decide elections: focusing on her crypto policies would be like flushing money down the toilet,” the person added.
Since Fairshake’s curtain-raiser in December, the group’s war chest has grown from $78mn to $85mn. “It just shows how hollow the rhetoric [from the crypto industry] about operating outside the system and decentralisation has always been. This was never about anything other than profit, and profit doesn’t come without getting the ‘system’ onside,” Allen added.
But decisions await crypto’s new super Pac that could leave it looking like a partisan group. Once primary season is finished, Fairshake will need to choose who it supports and who it attacks. Given that the majority of the crypto industry supporters are Republicans, that…
Read More: The crypto lobby’s newest target