A new cryptocurrency industry political action committee (PAC) plans to spend $20 million to support candidates and influence policy, it announced Friday (Jan. 28).
Supported by executives from several top industry investment firms, GMI PAC has already raised $5.3 million, according to Politico.
GMI PAC’s initial goal is clear regulatory framework for the cryptocurrency industry, according to its website. It will support “candidates who work to give U.S.-based innovators the opportunity to build next-generation technologies and services here in America rather than doing that valuable work overseas.”
The move comes as companies across the cryptocurrency and blockchain business race to catch up on lobbying in the face of growing interest by members of Congress and the White House — something multi-trillion-dollar industries usually have in place before growing that large.
Crypto does have the attention of the political classes. The clearest example of that was a very rare showing of bipartisanship in August, when 99 senators tried to amend the trillion-dollar infrastructure bill to fix language that the crypto industry said would require the collection of know your customer (KYC) information by parts of the industry that could not possibly collect it, like miners and software developers.
It was a last-minute addition that was considered poorly written more than hostile. Coinbase CEO Brian Armstrong tweeted that the “provision could have a profound negative impact on crypto in the U.S. and unintentionally push more innovation offshore.”
“Supporting innovation” became a key phrase in the crypto political dialogue last year, with a fair shorthand being Republicans saying they want to support innovation with light-touch regulation, while many Democrats agreeing with the need to support innovation but adding that stronger consumer protections are needed.
As a result, a number of recent congressional hearings have produced fireworks, most notably the Senate’s Dec. 14 stablecoin hearing, which featured some aggressive attacks, most notably by Sen. Elizabeth Warren, who is increasingly positioning herself as a leading critic, and Sen. Sherrod Brown, who in May wrote a letter to urge then-Acting Comptroller of the Currency Michael Hsu to revisit his predecessor’s pro-crypto actions — something Hsu promptly did.
Others have been embracing the industry, notable among them Sen. Pat Toomey and Sen. Cynthia Lummis, a longtime bitcoin investor who entered the Senate in 2020 promising to educate her colleagues about crypto.
At the head of the corporate pack is Coinbase, which records show spent $1 million on lobbying efforts in the final quarter of 2021. Three other major exchanges, FTX.US, Gemini and Binance.US, began ramping up Washington, D.C., operations by hiring lobbying firms.
By far the biggest crypto name in political donations is FTX CEO Sam Bankman-Fried, thought to be the richest of crypto’s billionaires. Bankman-Fried raised eyebrows and attracted plenty of political attention when he donated $5 million to President Joe Biden’s 2020 election campaign — making him the democratic candidate’s second-largest donor after former New York City Mayor and business news tycoon Michael Bloomberg.
Politico revealed Thursday (Jan. 27) that Bankman-Fried is backing Protect Our Future, a new Democratic super-PAC. While the cryptocurrency and blockchain industry is not its focus, the group plans to spend $10 million in the mid-term election cycle.
It’s worth noting that in an arena in which money equals access, the six industry executives invited to speak at a Dec. 9 hearing on digital assets’ place in finance’s future included Bankman-Fried and Coinbase Chief Financial Officer Alesia Haas.
That’s not to suggest that either was out of place, but still, they were there.
Of course, GMI PAC is not the only crypto lobbying effort on Capitol Hill — both the Blockchain Association and Chamber of Digital Commerce are active and recently stepped up spending. But GMI PAC has some big names in crypto finance: Blockchain Capital; CMS Holdings; Framework Ventures; FTX Digital Markets; Messari; Multicoin Capital; and Skybridge Capital’s Anthony Scaramucci, who was (very) briefly President Donald Trump’s press secretary.
A high-profile initiative formed last spring, the Crypto Council for Innovation, had some very big backers — Fidelity, Coinbase and payments firm Block, formerly Square — but it hasn’t been heard from much lately and industry news source The Block reported this week that it has “terminated its last contract.”