In a surprising twist, the cryptocurrency industry has emerged as the biggest corporate spender in the 2024 election, pouring millions into political campaigns and Super PACs. This unprecedented move has caught many by surprise, as crypto has traditionally been an afterthought in the political landscape. However, the industry's aggressive push to influence the outcome of key races has raised concerns about the potential impact of its deep pockets on the democratic process.

The Rise of Crypto's Political Influence

The cryptocurrency industry has quietly become a major player in the 2024 election, with nearly half of the $274 million in corporate money contributed during this year's elections coming from crypto firms. This figure dwarfs the contributions of other major corporate spenders, such as Koch Industries, which gave $40 million to its Super PAC. The industry's spending spree has been described as a "political money Death Star" that is being "aimed at the candidates and races," according to a report from the nonprofit watchdog Public Citizen.The crypto industry's aggressive spending appears to be driven by a desire to achieve its narrow policy agenda, which includes a demand for light-touch regulation in Washington. The industry's donations also seem to be a tactic to strike fear into the hearts of candidates, warning them that the industry will spend against them if they are perceived as being anti-crypto.

Crypto's Targeted Attacks on Progressive Candidates

The crypto industry's spending has been particularly focused on targeting progressive candidates who are not necessarily outspoken critics of the industry. For example, the industry-funded Super PAC Fairshake spent more than $10 million, roughly one-third of the total raised by Orange County's progressive congresswoman Katie Porter, on ads attacking her character. The group's explicit goal was not just to ensure that Porter lost, but to "terrify other politicians—'to warn anyone running for office that, if you are anti-crypto, the industry will come after you.'"Fairshake also waded into other races where progressive incumbents, such as Jamaal Bowman and Cori Bush, were already cruising toward losses, targeting them with the industry's deep pockets. Interestingly, the crypto PACs did not target their most outspoken critic in Congress, Massachusetts Sen. Elizabeth Warren, who was up for reelection this year. This suggests that the industry's strategy was to back "winners" in order to claim a sweeping victory.

The Crypto Industry's Regulatory Agenda

The crypto industry's spending spree is not just about winning elections; it's also about shaping the regulatory landscape in its favor. The industry has been actively challenging the Securities and Exchange Commission's (SEC) position that many cryptocurrencies should be regulated as securities. The industry generally opposes any legislation or proposals that would seek to regulate the industry or offer more consumer protections.The industry's preferred regulatory environment is one of "light-touch" oversight, which would allow it to operate with minimal interference from government agencies. This stance has put the industry at odds with regulators like SEC chair Gary Gensler, who has taken a more aggressive approach to enforcing existing financial regulations on crypto firms.

The Crypto Industry's Influence in the Trump Administration

The crypto industry's political influence extends beyond the 2024 election cycle. During his successful 2024 bid, President-elect Donald Trump actively courted crypto firms, pitching himself as "the crypto president." Trump pledged to make America "the crypto capital of the planet and the bitcoin superpower of the world," and promised to promptly fire SEC chair Gary Gensler and replace him with a regulator who is friendly to the industry.Now that Trump has won the election and Republicans have secured a governing trifecta in Washington, the crypto industry appears to have won the friendly regulatory environment it spent so much money to cultivate. The industry's Super PAC, Fairshake, already has $78 million on hand for the next election cycle, suggesting that it is not resting on its laurels and is prepared to continue its aggressive spending to maintain its political influence.