Original author: Wu Tianyi, DeThings
On July 23, according to the FEC official website, the blockchain group FairShake has become the largest super political action committee (Super PAC) in this election cycle, raising more than $200 million. According to CoinDesk, the fund has so far supported more than 20 members of Congress to achieve primary victories in the 2024 election. The vast majority of funds are managed through a coordinated group of PACs under Fairshake. The company behind Fairshake PAC and its affiliates declined to answer questions about its origins or ongoing relationship with the organization.
PAC, short for Political Action Committee, is an organization that collects and uses funds to support or oppose political candidates. PACs typically follow specific contribution restrictions and reporting regulations and operate within the contribution limits for individuals and entities. They can also donate directly to candidates' campaigns.
Super PACs, on the other hand, have the ability to raise and spend unlimited amounts of money but are not allowed to donate directly to candidates or parties.
Fairshake PAC, created in 2023 by a dozen cryptocurrency companies, has become one of the highest-spending PACs in the 2024 election cycle. Crypto-friendly venture capital firm Andreessen Horowitz, cryptocurrency exchange platform Coinbase, veteran venture capitalist Ron Conway, venture capital executive Fred Wilson, tech executives Cameron and Tyler Winklevoss, and crypto solutions company Ripple have all donated to Fairshake.
Currently, Fairshake PAC is openly "influencing" U.S. politics. Kara Calvert, head of U.S. policy at Coinbase, once said that Coinbase is committed to "educating" members of Congress so that "when they are asked about cryptocurrency at town hall, or when they are asked about cryptocurrency by Fairshake or any other organization, they'd better know what they are talking about."
Various crypto institutions represented by Fairshake PAC are no longer satisfied with keeping themselves behind the scenes. Cryptocurrency practitioners and enthusiasts will choose a president for themselves:
"Fairshake supports candidates who are committed to ensuring that the United States becomes the home of the next generation of Internet innovators.
If the broader open blockchain economy is to realize its full potential in the United States, it is critical to provide blockchain innovators with the ability to develop their networks under a clearer regulatory and legal framework."
Crypto’s initial arrival on the political stage began in 2021, the year that saw the first major surge in crypto lobbying, when various aspects of the industry (Bitcoin, alternative currencies, NFTs, blockchain) gained mainstream exposure, political recognition, and wild valuations as lockdowns sparked interest in virtual economies and get-rich-quick schemes. The then-nascent Biden administration had already turned its attention to cryptocurrency regulation, with the SEC filing securities charges against Ripple in February of that year while also approving a listing request from cryptocurrency exchange Coinbase. One of the company’s largest investors, prominent venture capital firm Andreessen Horowitz, poured money into other crypto players and launched an aggressive lobbying campaign to shield the industry from tax reporting and money-laundering regulations—most importantly, to keep it out of SEC oversight.
The results came quickly: Before it was passed in November, Biden’s infrastructure bill contained extensive tax reporting requirements for Bitcoin miners, but these requirements were significantly weakened due to aggressive lobbying.
Members of the Biden administration and members of Congress (regardless of party) such as Senators Kirsten Gillibrand and Cynthia Lummis, who were “hospitable” to several crypto Grayscale, Blockchain Association, Chamber of Digital Commerce, BTC Inc., etc., and introduced a bill during the summer 2022 cryptocurrency crash that would achieve the lobbyists’ goals of transferring governance away from the SEC and exempting digital assets from certain tax requirements, such as capital gains taxes.
There was also an important lobbyist in this, former FTX founder Sam Bankman-Fried, and the senator who received cash from SBF proposed a more relaxed bill that would also put cryptocurrencies under the supervision of the Commodity Futures Trading Commission.
However, after FTX collapsed in late 2022, it was discovered that SBF, one of the biggest spenders in the US campaign at the time, was primarily responsible for covering up a Ponzi scheme, and all politicians who shook hands with SBF received "extra attention," and the crypto industry's enthusiasm for handouts faded. The industry, already hurt by the impact of rising interest rates and the misconduct of companies like Terraform Labs and Celsius (and eager lobbyists), seems ready to temporarily retreat, as evidenced by the conspicuous lack of crypto ads in the 2023 Super Bowl.
AI and Web3 join forces to disrupt
After FTX collapsed, the Biden administration began to go after every major cryptocurrency company, scoring some major legal victories in the process - for example, Binance, once the world's largest cryptocurrency exchange, completely collapsed due to US and international prosecutions. (Its former CEO, Changpeng Zhao, was forced to leave the company and the crypto space and was sentenced to four months in prison.) The day after filing its lawsuit against Binance, the SEC also sued Coinbase, the largest U.S. crypto exchange, for acting as an unregistered securities agency—a lawsuit that, if successful, could have completely destroyed Coinbase’s business model.
But just weeks after SBF’s collapse, another seed for the crypto lobby’s comeback was planted: the launch of ChatGPT.
As the impressive chatbot became one of the fastest-growing apps ever, crypto bros and their investors noticed the technology’s rapid adoption by consumers and professionals, and realized they had an opportunity to build a natural alliance. The CEO of ChatGPT’s parent company, OpenAI, is also a crypto enthusiast and has a stake in WorldCoin, an Andreessen Horowitz-backed biometric cryptocurrency project.
The booming AI startups and companies also need a lot of infrastructure to handle their resource-intensive technology — and struggling cryptocurrency miners have a lot of idle infrastructure, including data centers, cooling systems, and energy connections, that companies need to catch up with OpenAI's progress. Financially distressed digital asset experts found that they could take advantage of the investment hype around AI by incorporating the technology into crypto processes, and the value of these so-called AI tokens has indeed soared, just like every other AI-related company today.
But beyond material interests, cryptocurrency enthusiasts and AI bulls have something more important in common: a desire for unchecked growth and an aversion to regulatory burdens.
Those who believe in effective accelerationism believe that any slowdown in AI development is dangerous to the mission of promoting life-changing AI that can take humanity to new frontiers and make a lot of money for its practitioners. They marched under the mantra of a “Techno-Optimist Manifesto,” which encourages all technology to develop unhindered — without government interference or regulation.
And the boldest Bitcoin and cryptocurrency supporters, including Coinbase’s Brian Armstrong, embraced this philosophy. It also changed the way they lobby.
And so, crypto activity took a sharp turn to the right. The Biden administration’s crackdown on cryptocurrencies and attempts to set guidelines for artificial intelligence have angered both industries, with technologists eager for a radical change — one that’s more libertarian and generally hands-off.
From Pawns to Players
Just as Coinbase launched its “Stand With Crypto” campaign in August 2023, Brian Armstrong announced that he and his company would donate to the super PAC Fairshake.
Fairshake PAC has thus entered the American political arena, with its chief spokesman and organizer being Josh Vlasto, who served as an assistant to the current Senate Majority Leader and former New York governor.
While running Fairshake, Vlasto also coordinates the billionaire-backed Peace Facts, a pro-Israel group formed after October 7 to shape the information environment surrounding the Gaza war. In the early months of the war, Peace Facts was one of the largest ad buyers on the web, spending nearly $500,000 on targeted ads to combat online criticism of Israel.
The huge spending figures for cryptocurrencies in this election year were boosted by the recent rise in virtual currencies. The price of Bitcoin jumped to an all-time high of $73,000, partly due to a slowdown in mining that limited supply. (BTC is currently trading at $69,000.)
The Biden administration fueled this market rally and has helped make a lot of money for donors who are now spending money on campaigns. But SEC Chairman Gary Gensler remains a staunch opponent of cryptocurrencies. Therefore, Fairshake PAC, with its deep pockets, carefully selected campaign targets, eradicated politicians who criticized the industry, and cultivated new allies in both parties to replace them.
One of the most famous impacts came in March of this year, when Democratic radical star Katie Porter raised more than $30 million in her campaign and had a considerable chance of winning a California Senate seat. But Porter follows Elizabeth Warren's political line and played an important role in Harris's fight against banks, so she was identified by Fairshake as Warren's potential "anti-crypto ally."
During the California primary, Fairshake spent more than $10 million to undercut Porter’s young voter base. Banners hung over Hollywood and vans on the Walk of Fame were filled with pointed comments about Porter, who misled voters into accepting bills that benefited big business. Ultimately, about a third of Porter’s campaign funds were hedged by Fairshake, causing her to fall behind fellow Democrat Adam Schiff in the fall’s general election.
Leveraging Republican Control of the Senate
Whether cryptocurrencies can claim that their ads influenced primary results in a large state like California is debatable, but Fairshake is certainly trying to swing the Senate to Republican control in order to gain more influence in the House.
Republicans are generally more inclined to deregulate cryptocurrencies, so the mission of these PACs is to gain a larger foothold within the Democratic Party. Fairshake’s top donors, Ripple, Andreessen Horowitz, and Coinbase, have contributed more than $1 million to the House Majority PAC, the campaign spending arm controlled by House Minority Leader Hakeem Jeffries (D-NY). Coinbase has also donated $500,000 each to the Republican Senate Leadership Fund and the Democratic Senate Majority PAC, according to campaign finance analyst Open Secrets.
Two races are particularly symbolic of crypto PACs choosing to back friendly Democrats in crowded open seats.
In Alabama’s new majority-Black 2nd Congressional District, which is heading into a Democratic primary runoff, Shomari Figures is expected to outpace his opponent thanks to $1.7 million in campaign cash from the group Protect Progress.
In Texas’ 32nd District, Julie Johnson recently won a contentious Democratic primary to unseat Colin Allred, who was running for U.S. Senate. Johnson has also benefited from cryptocurrency money.
Like Adam Schiff, both Figes and Johnson have opened a section on their campaign pages dedicated to supporting cryptocurrencies, a clear signal to super PACs seeking financial support from the industry. But voters don’t seem to care much about these initiatives, and cryptocurrency has never been listed in the top 20 priorities in question surveys.
In some races, cryptocurrency groups don’t have to spend any money at all to influence politicians’ behavior. Fairshake said it still plans to participate in Senate races in Michigan and Maryland, but has not yet chosen sides. The looming threat is already affecting candidates’ positions.
During the Maryland Democratic primary, Democratic Rep. David Trone and Prince George’s County Mayor Angela Alsobrooks both expressed an openness to cryptocurrencies, though they had not previously taken a hardline stance. Trone co-signed a letter with cryptocurrency critic Elizabeth Warren last year calling for stronger enforcement, but has more recently been echoing industry views. Trone said he believes in legal certainty for cryptocurrency companies so that the United States does not “fall behind in the global race for technological advancement and economic competitiveness.”
Alsobrooks also praised blockchain technology, emphasizing that it “can help all Americans, including traditionally underserved communities, have the opportunity to create generational wealth for their families.”
This phenomenon is not only happening in the electoral sphere, but also directly in messages sent to incumbent officials. According to CNBC, a dark money nonprofit called the Cedar Innovation Foundation "is heavily funded by cryptocurrency industry players" and has run ads encouraging cryptocurrency enthusiasts to ask Ohio Senator Sherrod Brown to oppose SEC Chairman Gary Gensler and Senator Elizabeth Warren.
American businessman and investor Ben Horowitz wrote a blog post in December denouncing "misguided and politicized regulation," condemning lobbyists who "often run counter to a positive technological future," and announcing that the company would pursue its political interests thus: "If candidates support an optimistic technology-enabled future, we support them. If they want to stifle important technologies, we oppose them. These important technologies include artificial intelligence and decentralized technologies from the blockchain/crypto/web3 ecosystem."
It is not difficult to see that deregulation may have become a common demand in the rapidly developing technology field. After Trump shouted at the 2024 Bitcoin Conference that he would "fire the current SEC chairman as soon as he took office", this sentiment reached its peak, and Trump also transformed himself into a "crypto savior". However, at the same time, an interesting data is that Fairshake has raised $202 million, even quietly surpassing MAGA led by Trump.
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