Crypto Industry Spent Millions on US Midterm Elections in Heavy Loss Year

The crypto industry has spent millions of dollars on US midterm election races during a year of heavy losses and volatility in the sector, which is expected to gain traction. influence of lawmakers as Congress debates tighter regulation of digital assets.

Crypto evangelists view 2023 as a pivotal year for regulation, with Congress expected to make progress on legislation on digital goods and stablecoins, a category electronic money pegged to the US dollar. Crypto companies are eager to support industry-friendly political candidates.

The election comes at a tumultuous time for the crypto industry. Bitcoin’s the price has spiked about 70% from its peak, investors are more worried about the risk of crypto assets and on Tuesday, the crypto giant Binance expected to agree to buy FTX’s a non-US entity to help a rival exchange deal with a “liquidity crisis”.

Who in crypto is spending money on the midterm elections?

The CEO of FTX, Sam Bankman-Fried, has far surpassed all others in the crypto industry. His donation of nearly $40 million (approximately Rs 330) to campaigns during this election cycle makes him the sixth largest individual donor in the US, according to the personal donor list. the largest of OpenSecrets.

According to OpenSecrets, most of his spending is pro-Democrats.

The deal with Binance announced by Bankman-Fried on Tuesday marked an abrupt shift in assets for the crypto entrepreneur.

Ryan Salame, CEO of an FTX subsidiary, is the 14th largest individual donor on the list, giving over $23.6 million (about Rs 20), all to Republicans, including $11,600 (about $9,42,400) backs the campaign of Representative Alex Mooney, a Republican from West Virginia.

FTX did not respond to a Reuters request to confirm those figures.

SkybridgeThe digital asset investment management firm founded by former Trump White House communications director Anthony Scaramucci, has contributed $100,000 (about Rs 800) to the Crypto Innovation super PAC this year, as well as Scaramucci herself.

“People have spoken: they believe in the promise of blockchain technology, they want more financial inclusion, and they demand policymakers listen. That’s why, at SkyBridge, We’ve made such a big bet on crypto – and just as importantly on the underlying blockchain technology,” a Skybridge spokesperson said.

Which candidate is receiving money from crypto?

Lawmakers interested in systematizing crypto legislation, as well as leaders of influential committees, have received cash from crypto-related PACs.

Two of the largest public crypto companies in the US, Coinbase and Robinhood, also have PACs that have spent more than $11,000 (approximately 8,93,700 crore) and $44,000 (approximately 35,74,900 crore) respectively. leading up to midterm elections, according to FEC data and confirmed by companies.

Coinbase, Robin Hood hero and industry trade group the Digital Chamber of Commerce both had their PACs donate to Patrick McHenry, FEC filings show. As the top Republican serving on the House Financial Services Committee, McHenry is likely to become its chairman if Republicans gain control of the House. The Chamber of Digital Commerce did not respond to its request to confirm its contribution.

Crypto Innovation’s Super PAC spent at least $167,000 (approximately Rs. 1.35 crore) to support McHenry’s re-election campaign by paying for advertising and direct mail campaigns. The group did not respond to its request to confirm its contribution.

Coinbase, the Digital Chamber of Commerce, and crypto-focused HODLpac made donations to Senetor Ron Wyden, Democratic Chairman of the Senate Finance Committee, according to FEC filings. The Crypto Innovation PAC spent more than $356,000 (about Rs 2.90) on independent expenditures supporting Senator John Boozman, the top Republican on the Senate Agriculture Committee.

What is the crypto industry looking to turn a profit on?

Cryptocurrency companies can expect to influence the legislation as policymakers push ahead with digital asset legislation in the coming months.

McHenry and Maxine Waters, a Democrat who currently chairs the House Financial Services Committee, are negotiating a bipartisan stablecoin bill. While details are yet to be finalized, most analysts see stablecoins as a renaissance crypto problem that lawmakers must address.

Cryptocurrency companies like Circle want lawmakers to create a framework for stablecoins to help develop the industry and codify consumer protections. Currently, there is no federal regulator that oversees stablecoins.

Boozman and Stabenow, along with Senators Cory Booker and John Thune, introduced the Digital Goods Consumer Protection Act of 2022, a bipartisan bill that would give more powers to the CFTC to regulate money electronic.

Some in the crypto space, such as Ryan Selkis, founder and CEO of crypto market intelligence firm Messari, have expressed concern that the bill poses an existential threat. for Decentralized Finance (DeFi)Requires decentralized crypto exchanges to register with Commodity Futures Trading Commission (CFTC).

DeFi proponents in particular, and crypto companies in general, are likely to hope that their campaign contributions will help them make their case to the election winners.

© Thomson Reuters 2022

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