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How crypto spent its way into political power

A lot of ink has been spilled about the campaign ambitions of the crypto sector. Throughout that time, the strategy has been questionable, the money has been tremendous and the results have been ambiguous.

Is 2024 the cycle that begins to change? We think it’s too early to say. But there’s no question that this year has been different for crypto’s top political strategists. The past week in Congress was a clear sign that the sector’s political fortunes are experiencing a tectonic shift.

Will that translate to the campaign trail? Crypto leaders think it can as they focus on an approach that doesn’t fit neatly along partisan lines.

The money: A trio of crypto super PACs has amassed a war chest from industry leaders worth more than $80 million. That is a lot of cash for an industry that has existed for less than two decades.

But there’s a big difference between dumb money and smart money in campaigns. Crypto’s influence over the 2022 election was defined by tens of millions in bipartisan contributions from the now-disgraced founder of crypto exchange FTX, Sam Bankman-Fried.

The industry’s reputation cratered along with his. That’s part of what makes the crypto’s political turnaround in 2024 so remarkable.

The approach: Rather than unleashing an indiscriminate money cannon in 2024, affiliated crypto PACs including Fairshake, Defend American Jobs and Protect Progress have picked races that aren’t always high-profile.

Ryan Selkis, CEO and founder of the crypto analytics firm Messari, isn’t officially affiliated with those groups. But Selkis has emerged as a sort of unofficial spokesperson for the digital asset sector through his political and combative presence on social media, particularly X, formerly known as Twitter.

When we asked about his preferences in 2024, Selkis’ answer was a good distillation of the strategy we’ve seen from crypto PACs so far.

Low-profile challenger candidates who’ve received strong support from crypto PACs include Julie Johnson of Texas and Shomari Figures of Alabama, both Democrats who won competitive primaries this year. Johnson saw just under $1 million in support from Protect Progress, while Figures benefited from $1.8 million.

Other Democratic candidates in the mix include Baltimore County Executive Johnny Olszewski and Eugene Vindman, a retired United States Army infantry officer running in Virginia.

Democratic House members running for Senate are also making crypto-friendly noises. Reps. Adam Schiff (D-Calif.), Elissa Slotkin (D-Mich.), Ruben Gallego (D-Ariz.) and Andy Kim (D-N.J.) all voted in favor of FIT this week.

Looking ahead: The Senate will likely be the real test of crypto’s might in 2024 as it sees if it can help pick off some Democratic incumbents in races that could determine control of the chamber.

The industry will almost certainly spend big in Ohio and Montana where Democratic incumbents and crypto skeptics Sens. Sherrod Brown and Jon Tester face difficult reelection contests.

Then there is the crypto industry’s white whale: Sen. Elizabeth Warren (D-Mass.). She has two Republican candidates — both longshot challengers — with crypto ties competing to take her on in the general election.

For now, Warren isn’t too worried.

“I don’t know who, as a candidate for office, wants to stand up and defend North Korea financing half of their nuclear missile program with crypto,” Warren told us. “That’s just nuts. But if somebody wants to run on that, have at it.”

— Brendan Pedersen

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Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.