How Coinbase went from DC ‘kids table’ to political power seat
As Donald Trump embraces cryptocurrency aficionados in search of votes and campaign contributions, the deepest pockets in the industry are conspicuously absent from the list of his donors.
The crypto-world heavyweight Brian Armstrong, his exchange Coinbase Global Inc. and the super PACs they fund haven’t given anything to Trump’s campaign yet. Nor have they donated to his opponent, Vice President Kamala Harris.
Instead, they’re pursuing a strategy of targeted donations to congressional campaigns, in ways that are shaking up races across the country. Their money and lobbying influence also appear to be helping to put crypto firmly on the political agenda, as evidenced by the bipartisan support for Republican-sponsored legislation that was passed in the House in May, and an effort currently underway in the Senate.
Coinbase has emerged as the digital-asset sector’s top US political donor, a notable distinction at a time when surging spending on federal elections by crypto firms has made them the biggest corporate contributors in the 2024 cycle, according to data from research firm OpenSecrets and a related analysis in a report last month from watchdog Public Citizen.
“Having money, unfortunately, is a big part of the way government works in the US,” Armstrong, the billionaire co-founder and chief executive officer of Coinbase, explained during an August interview on the Moment of Zen podcast. Coinbase didn’t make Armstrong available for an interview with Bloomberg.
The crypto industry has accounted for almost half of the nearly $250 million in corporate donations to political campaigns in 2024, the Public Citizen analysis shows. Coinbase alone is responsible for more than $52 million of that amount.
Critics blanche at the massive sums being deployed by an industry whose history is riddled with scams and scandals, and whose prior champion on Capitol Hill – Sam Bankman-Fried – is now in prison for his role in the implosion of FTX, the exchange he helped found. The industry’s tactics also set a bad precedent, they say.
“This Big Crypto threat in many districts, combined with targeted deployments, has already changed dynamics in races and in Congress,” Public Citizen wrote in its report. “It is akin to a corporate Death Star hovering over elections, poised to annihilate individual candidates in order to instill a discipline – acquiescence to corporate demands – among all candidates.”
Crypto fans argue that Coinbase is, in fact, championing the interests of millions of people in the US who want continued access to hold and trade digital assets.
For Coinbase and other big crypto spenders, the goal is to push through legislation that would provide a clearer regulatory framework for the industry and give it legitimacy after years of what they claim has been regulation by enforcement, chiefly from the Securities and Exchange Commission.
Coinbase itself is embroiled in a legal battle with the SEC that strikes at the heart of its business and could potentially shave as much as 30% off of its revenue, according Owen Lau, an analyst at Oppenheimer & Co.
New crypto-friendly legislation and political support from the White House and Congress could potentially shrink, or even eliminate Coinbase’s risk, while shifting oversight away from the SEC and its combative current chair Gary Gensler.
Rather than focusing on a particular party or presidential candidate, Coinbase and other big-spending firms including Ripple and Jump Crypto have funneled donations to pro-crypto political action committees such as the nonpartisan group Fairshake, which leads all PACs in money raised, according to OpenSecrets.
“It is rather striking that they are putting so much investor money – that’s what it is – displacing it in Washington,” said Todd White, a longtime lobbyist, referring to Coinbase’s outlays.
‘Political Suicide’
Fairshake’s cash is devoted to supporting Congressional candidates on either side of the aisle who are friendly to the industry, while opposing critics. At a time when control of both houses of Congress is potentially up for grabs, it’s a potent strategy.
The group and two affiliated super PACs intervened in both Democratic and Republican primaries in the current cycle to elect candidates more supportive of the crypto industry.
Fairshake has already touted its influence, claiming it helped to unseat progressive House Democrats Jamaal Bowman of New York and Cori Bush of Missouri, in recent primary elections. According to Public Citizen, the industry won its preferred outcome in 36 out of 42 primary races in which crypto-backed super PACs intervened.
“It’s now become quite risky, I would say even maybe political suicide, to be anti-crypto in DC,” Armstrong, 41, told Moment of Zen.
Fairshake and related PACs recently unveiled new general-election spending on Senate races, including support for two Democrats now in the House – Ruben Gallego of Arizona and Elissa Slotkin of Michigan. This raised the ire of GOP lawmakers who cite the anti-crypto stance of prominent Senate Democrats such as Elizabeth Warren.
“It is puzzling that an industry facing such an existential threat would support any effort that could lead to continued Democrat control over the Senate,” Bill Hagerty, Republican senator from Tennessee, said in a statement. Hagerty has become a liaison between the crypto industry and the pro-crypto Trump campaign.
Despite the ruffled feathers on the Republican side, crypto executives have an interest in gaining influence with whomever ends up with the power in Washington. Coinbase representatives have talked with the Trump campaign. The company also had a presence at two meetings with White House advisers, in July and August, and has been in touch with the Harris campaign, according to people familiar with the matter who declined to be named because the discussions were private.
Democrats have seized on the shakeup at the top of the ticket to reset its messaging on crypto. On Aug. 14, a grassroots group convened a townhall called Crypto4Harris with Democratic politicians including Senator Chuck Schumer and Debbie Stabenow.
Coinbase also held events for Latino leaders at both the Republican and the Democratic conventions this year. Armstrong frequently posts photos of himself and his team on Capitol Hill, once even inviting anyone interested in crypto legislation to stop by and chat over ice cream.
Armstrong himself has made some 91 contributions, to both Republican and Democratic candidates, over the years, according to the Federal Election Commission website. He supported New York Democrat Tom Suozzi in his recent run for Congress, for example. But last year, he also contributed to the Senate campaign of JD Vance, the current Republican vice presidential nominee.
Coinbase is blanketing Capitol Hill with dozens of lobbyists and is behind the now-independent organization StandWithCrypto.org, which launched last year and now claims more than 1.3 million advocates. The organization’s constituency has lobbed more than 220,000 emails and calls to Congress and other policymakers, according to the nonprofit.
“There’s generally just a lot more advocacy happening at the grassroots,” said Representative Raja Krishnamoorthi, a Democrat from Illinois. “There’s just a lot more interest in this issue.”
Coinbase over the years has built up internal teams focused on policy and legal issues, tapping experts with a range of backgrounds and experience in government. Its chief policy officer, Faryar Shirzad, is a former global co-head of government affairs at Goldman Sachs Group Inc., a member of the staff of the National Security Council under President George W. Bush and worked at the Commerce Department. Coinbase Chief Legal Officer Paul Grewal joined Coinbase in 2020 from Facebook and also served as a US magistrate judge for the Northern District of California.
Money Matters
Back in 2021, when Armstrong hired Shirzad, the exchange only had one part-timer focused on policy work, he said in an interview. Today, the company has a number of people focused just on policy, Shirzad said.
“It’s an enormous priority of Coinbase to educate policymakers and candidates at all levels,” Shirzad said. “We spend a significant amount of time to educate on crypto issues.”
Of course, time isn’t all they’re spending. In the Moment of Zen podcast, Armstrong described how seemingly fruitless meetings with lawmakers in recent years led the company to take a page from other politically savvy industries like pharma and energy. “We were sort of basically at the little-kids’ table in DC as an industry,” Armstrong said.
“To actually be on everyone’s radar and have political power in DC and actually matter, a couple of things were required: One was that we needed to have money – specifically, the industry needed to be giving more to super PACs,” he went on. The second thing “was a big grass-roots movement with a bunch of voters,” like what grew into StandWithCrypto. He said these efforts, combined with lobbying efforts around policy, “are all sort of legs of the stool that we as an industry have had to get better at.”