The crypto industry has promoted the internet-based currencies, claiming that cryptocurrencies are an alternative to government-issued currencies, like the dollar or the yen. Cryptocurrencies have exploded in popularity in recent years, growing into a $2.5 trillion global industry; although, many buying crypto treat these currencies like investments, rather than using them for everyday purchases.

Crypto has been marketed to everyday consumers as a way to fight back against large banks that have screwed regular people over. Crypto companies ran commercials during the Super Bowl, placed ads in key locations around Washington, DC, during the 2022 primary elections, and publicized that their products were a way to earn passive income.

But crypto’s boom came to a screeching halt in 2022 after three major exchanges — Celsius, Terra, and Bankman-Fried’s FTX — failed. With the collapse of these online platforms, where digital currencies were bought, sold, and traded, millions of Americans lost access to their funds. Some people lost their life’s savings, and because the funds are not thoroughly regulated, many of the funds cannot be fully recovered.

Now, as the 2024 election looms, crypto companies have discarded their old messaging of fighting big banks and standing up for the little guy, by partnering with major banks, leaning into libertarian values, and casting their support for Trump.

This includes the founder of Kraken, an exchange that allegedly violated sanctions against Iran; the Winklevoss twins, two brothers who were former business partners with Mark Zuckerberg in the early days of Facebook, who went on to create their own crypto exchange called Gemini; and others.

“President Donald J. Trump is the pro-Bitcoin, pro-crypto, and pro-business choice,” Tyler Winklevoss posted on X. “It’s time to take our country back. It’s time for the crypto army to send a message to Washington. That attacking us is political suicide.”

Trump has reportedly raised more than $4 million in cryptocurrency donations for his reelection. When he spoke at a bitcoin conference on July 27, he pledged to fire SEC chair Gensler “on day one,” and promised to make the United States “the crypto capital of the planet.”

Trump later held a conference after the event that reportedly cost $800,000 to attend.

Leading the crypto industry’s political movement is Fairshake PAC, a crypto-backed political action committee that has accumulated a staggering $202 million since January 2023. Fairshake has been supporting pro-crypto candidates and trying to oust candidates — mostly Democrats — who have pushed back on the crypto agenda.

The group has spent more than $12 million against Democrats so far this election cycle, according to OpenSecrets. Josh Vlasto, a Fairshake spokesperson, is also a former aide to Sen. Chuck Schumer (D-NY) and previously served as chief of staff to former New York governor Andrew Cuomo (D).

Defend American Jobs, another crypto-focused political action committee, has raised nearly $20 million and spent more than $17 million since September 2023, according to federal election data.

“The crypto industry is spending hundreds of millions of dollars to distract policymakers and the public from its long rap sheet of criminal convictions, predatory conduct, illegal behavior, bankruptcies, lawsuits, and scandals,” said Dennis Kelleher, president of consumer advocacy group Better Markets. “These crypto PACs are looking to make the crypto industry’s work in Congress even easier by trying to defeat elected officials who put the public interest first and are not crypto-lackeys.”

The amount of money that has poured into campaign coffers has seemingly convinced Vice President Harris to adopt a more friendly position on cryptocurrencies, as the Democratic Party’s presidential candidate tries to cozy up to the tech and investor industries by having her advisers meet with industry leaders.

It’s a transition echoed by others on the Left. Fourteen current members of Congress, as well as other politicians, recently sent a letter to Jaime Harrison, the Democratic National Committee chair, urging the party to adopt a more pro-crypto platform, and to potentially fire SEC chair Gensler. The decision to send the letter appears to stem from the crypto industry’s outsize role in elections.

“There is a public perception that the party holds a negative viewpoint on digital assets, largely due to the current SEC’s approach to these transformative technologies,” the group wrote. “We believe this previous hostility does not reflect our party’s progressive, forward-looking, and inclusive values. From an electoral standpoint, crypto and blockchain technologies have an outsized impact in ensuring victories up and down the ballot.”

Coinbase and a16z did not respond to requests for comment.

Before he was charged and sentenced to prison for twenty-five years, Bankman-Fried, the mop-topped billionaire who fashioned himself as a leader for the crypto industry, frequently lobbied lawmakers and lavishly donated to politicians overseeing key committees governing the crypto industry.

The industry faced major setbacks in the spring of 2023, when Silicon Valley Bank and Signature Bank — two institutions that partnered heavily with crypto and tech companies — failed after funding for start-ups began drying up amid rising inflation, and depositors made a run to pull their money out.

After the collapse of those institutions, many crypto companies began partnering with major traditional banks that were deemed “too big to fail” during the 2008 financial crisis. These banks include JPMorgan Chase, Citi, Bank of America, Wells Fargo, and other regional banks.

These setbacks also opened up space for Coinbase to essentially fill the void vacated by Bankman-Fried.

“[Coinbase has] tried to take a more conservative approach than some of the more Wild West firms out there, but they, like everyone else, have a business model set up that is at odds with basic financial regulatory standards,” Hays with Americans for Financial Reform said.

Coinbase has donated a staggering $51 million to just seven groups so far this election cycle, according to federal records. The exchange gave $500,000 to both the Congressional Leadership Fund and the Senate Leadership Fund — two political action committees dedicated to electing Republicans.

Coinbase also gave $500,000 to HMP and SMP, two political action committees set up to elect Democrats.

Nearly $46 million of Coinbase’s spending went to Fairshake alone. Coinbase Commerce, a Coinbase subsidiary, also gave $15.5 million to Fairshake, according to election data, bringing the total that Coinbase gave to Fairshake to at least $61.5 million.

According to OpenSecrets, Fairshake has spent money supporting both Democrats and Republicans, but who the group opposes is much different. Fairshake has spent $0 opposing Republicans and more than $12 million attacking Democrats in tight primary races.

Fairshake spent the bulk of its money — more than $10 million — opposing Rep. Katie Porter (D-CA) during a primary race for a senate seat against Rep. Adam Schiff (D-CA), who received an A-rating from the crypto industry. The group also spent more than $2 million opposing Rep. Jamaal Bowman (D-NY) during his primary race earlier this year, according to Follow the Crypto, a website dedicated to tracking crypto industry campaign spending.

Both Bowman and Porter were deemed “strongly against crypto” by Stand With Crypto, a nonprofit dedicated to “common-sense regulations for the crypto industry.”

Besides Coinbase, other major donors to Fairshake include Ripple Labs; AH Capital Management, an investment arm of a16z; Ben Horowitz and Marc Andreessen, cofounders of a16z; Jump Crypto, a blockchain technology company; Tyler and Cameron Winklevoss; and Brian Armstrong, Coinbase’s CEO.

Coinbase, Ripple Labs, AH Capital Management, Horowitz, Andreessen, and even Fairshake have also donated to Defend American Jobs PAC, another political action committee dedicated to pushing pro-crypto candidates that has raised nearly $20 million. The committee has spent more than $15.5 million supporting Republican candidates so far this election cycle, according to OpenSecrets.

Additionally, Defend American Jobs has spent more than $500,000 supporting Blake Masters in a Republican primary race for a seat representing Arizona in Congress. Masters previously ran against Sen. Mark Kelly (D-AZ) in 2022, in which Masters ran an infamous and disturbing ad highlighting his intense love of guns.

In addition to generous campaign donations, crypto companies have also zeroed in on the key agencies overseeing their industry.

For years, the crypto industry has lobbied lawmakers and regulators to allow the Commodity Futures Trading Commission (CFTC) to govern crypto, rather than the comparatively heavily staffed and well-funded SEC. The CFTC has only 725 employees, a budget of $365 million, and has traditionally regulated trades and futures contracts for the agricultural and resource-based markets.

“The weakness that we have, or the shortcoming, is that we have to rely on folks coming to us and providing tips or complaints,” said CFTC chair Rostin Behnam during a June 13 Senate hearing. “We don’t have those traditional regulatory tools — registration, custody, surveillance, oversight — that have really made American capital and derivatives markets so strong.”

The CFTC has oversight authority of bitcoin because the agency considers it a commodity and, to a lesser degree, the agency oversees certain activity on crypto exchanges. But the bulk of crypto regulation has historically been handled by Gensler’s SEC — a sprawling agency with more than 4,600 employees, and a budget of $2.1 billion.

The SEC has been aggressive at times in issuing enforcement actions against crypto exchanges and developers who create new cryptocurrencies, with actions dating back to 2012. The agency views cryptocurrencies as a security — a financial product akin to a stock issued by a company — which has much stricter oversight and enforcement than commodities overseen by the CFTC.

In 2023, the SEC issued forty-six cryptocurrency-related enforcement actions, more than double the amount the agency issued in 2022, according to Cornerstone Research, a financial analysis and legal firm. Crypto companies have painted Gensler as an enemy of crypto, and Gensler has not shied away from that label.

“It is a field that is rife with abuse and fraud,” Gensler said during a June 13 Senate hearing. “And some of the leaders of this whole field are either in jail, about to go to jail, or awaiting extradition. I mean tens of billions of dollars have been put at risk.”

According to lobbying disclosures, crypto companies, trade associations, and nonprofits associated with crypto have spent nearly $7 million in the first two quarters of 2024 lobbying lawmakers and regulators on a slew of crypto-related issues, including the Financial Innovation and Technology for the 21st Century Act (FIT21) — a bill packed with a number of crypto wish lists.

Coinbase alone has spent more than $2.3 million so far this year lobbying lawmakers and regulators on the bill and other issues, disclosures show.

The FIT21 would create a new asset class specifically for cryptocurrencies, called “invest contract assets,” which exclude them from the definition of a security, and likely hands oversight from the SEC over to the CFTC, according to an analysis by Better Markets.

The bill would allow the CFTC to collect registration and annual fees from crypto exchanges, but those fees would be capped at $40 million annually and the ability to collect those fees would expire after four years.

“​​This fixed cap is especially problematic given the hundreds of exchanges currently offering bitcoins and the need for the CFTC to hire staff, draft regulations, acquire technology, and enforce the provisions of the bill and the new rules,” Better Markets wrote.

The bill would also, according to Gensler, adopt a structure that runs counter to decades of Supreme Court rulings that establish what is and isn’t a security. He’s concerned this could erode long-standing investor protections, and “undermine the broader $100 trillion capital markets.”

“[Crypto exchanges] are choosing to not comply with US law that protects our capital markets,” Gensler said during Senate testimony. “Whether it is stored on an accounting ledger called blockchain or whether it is stored on a notepad, it doesn’t matter.”

The House of Representatives passed the crypto bill with two-thirds of lawmakers voting in favor. However, experts predict the bill will likely die in the Senate due to the Senate’s slower process of passing bills.

Currently standing in the way of the bill’s passage in the Senate is Sen. Sherrod Brown (D-OH), chairman of the Senate Committee on Banking, Housing, and Urban Affairs, which oversees the bill’s passage in the Senate. Brown has received an F-rating from Stand With Crypto, and has highlighted how cryptocurrencies have been used for illicit purposes.

Key provisions of the bill could still be attached to must-pass legislation before the year’s end.

Rep. Patrick McHenry (R-NC) has been one of crypto’s most important cheerleaders and is set to retire at the end of the current session. In an interview with CoinDesk, a crypto-focused news outlet, McHenry said that he is looking at “anything, and everything” to attach crypto legislation to before he leaves.

“We basically have a consensus product out of the House of Representatives that gives us a fighting chance in every legislative product that makes its way to the President’s desk,” McHenry said.

Hays, with Americans for Financial Reform, said the bill offers a “patina of legitimacy” while undermining consumers and that the crypto industry is using the “Washington pay-to-play” rule book to push their agenda.

“The crypto industry has long claimed that it needs regulatory clarity to address crypto regulation for consumers and investors and that the old rules don’t work for them,” Hays said. “The problem is that this bill is really more of a cure that’s worse than a disease.”