Crypto giant’s $76 million election push triggers watchdog complaint, exposes FEC inaction on ‘illegal’ campaign spending

As Coinbase’s political spending has surged past $76 million, critics argue that the FEC is failing in its regulatory responsibilities by not investigating these alleged violations.

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A new complaint filed by progressive watchdog group Public Citizen accuses the Federal Election Commission (FEC) of ignoring illegal campaign spending by cryptocurrency giant Coinbase, which has allegedly funneled tens of millions of dollars into the 2024 election. Public Citizen claims that Coinbase, a federal contractor, has violated federal election law by directing campaign contributions to political entities despite being prohibited from doing so due to its government contracts. As Coinbase’s political spending has surged past $76 million, critics argue that the FEC is failing in its regulatory responsibilities by not investigating these alleged violations.

Public Citizen raised alarms following a recent $25 million pledge from Coinbase’s CEO Brian Armstrong to Fairshake PAC, a political action committee focused on advancing the crypto industry’s interests by electing pro-crypto candidates. Fairshake PAC, which has already received millions from Coinbase, has financially supported both Republican and Democratic candidates, reflecting the high demand from both parties to secure the support of the influential cryptocurrency sector.

“Coinbase has spent more than $50 million in what appears to be illegal campaign contributions from a federal contractor to attack candidates who might stand up to Big Crypto,” said Public Citizen research director Rick Claypool. He condemned the FEC for its inaction, accusing it of “snoozing through the election” while powerful financial interests shape the democratic process. “The time to hold campaign finance violators accountable is now—not after illegal election spending has corrupted our democracy,” Claypool added.

Coinbase has become a major player in the 2024 election, with its total spending topping $76 million, largely directed toward supporting Fairshake PAC. According to Public Citizen’s August complaint, Coinbase’s substantial donations directly conflict with federal law, which bars campaign contributions from federal contractors. Federal contractors like Coinbase are prohibited from making campaign contributions because of the risk of undue influence and the potential for corruption in federal government contracts.

Public Citizen’s August report on election financing found that crypto companies have poured a record $119 million into this election cycle, with Coinbase responsible for nearly half of this spending. The watchdog claims that these contributions are targeted at “attacking candidates who might stand up to Big Crypto,” particularly those in favor of regulating the nascent industry. Coinbase’s spending strategy marks a sharp increase in financial influence from the cryptocurrency sector, traditionally dwarfed by spending from more established industries such as pharmaceuticals or energy.

Critics say the FEC’s response to Coinbase’s alleged violations highlights a troubling trend of weakened enforcement of campaign finance regulations. Chaired by Republican Sean Cooksey, who was appointed by Donald Trump, the FEC is evenly split between three Republican and three Democratic commissioners, often resulting in partisan deadlocks on key issues. With this division, the agency has repeatedly failed to take action on emerging issues, including the proliferation of AI-generated deepfakes and unchecked campaign spending.

Recent decisions from the FEC have loosened constraints on political spending, adding to concerns that the agency is enabling, rather than regulating, the influx of special interest money in politics. For example, a recent FEC ruling allowed super PACs to coordinate door-to-door canvassing efforts with campaign teams—an activity previously considered too closely tied to the campaigns themselves. The FEC also permitted anonymous contributions to be made through donor trusts, allowing wealthy individuals and corporations to shield their identities while influencing elections.

Such regulatory rollbacks, critics say, have emboldened entities like Coinbase, which are now testing the boundaries of federal election law. “When it comes to enforcing the rules on campaign finance, everything looks good on paper but has turned out meaningless in practice when it comes to Big Crypto,” said John Ramming Chappell, a legal and policy adviser at the Center for Civilians in Conflict. This pattern of inaction, watchdogs argue, represents a systemic failure by the FEC to protect the integrity of U.S. elections.

As cryptocurrency firms establish themselves as significant political donors, both major parties have shown increased willingness to court the industry’s support. Coinbase’s bipartisan donations through Fairshake PAC highlight this trend, with funds supporting candidates on both sides of the aisle. This surge in crypto-backed political donations has amplified concerns among campaign finance watchdogs and progressive groups who fear that the industry will leverage its financial power to fight potential regulation.

Coinbase’s spending, critics argue, illustrates a deliberate attempt by the crypto industry to shield itself from regulatory oversight by investing heavily in campaigns and candidates. The cryptocurrency industry, still in its early stages, is keenly aware of its regulatory vulnerabilities, as the U.S. government debates how to oversee the sector. Major contributions from Coinbase and other crypto firms signal the industry’s intent to secure regulatory outcomes favorable to their interests, potentially at the expense of public accountability.

The 2024 election cycle, according to OpenSecrets, is poised to be the most expensive in U.S. history, fueled by both direct donations and untraceable dark money contributions. Americans for Tax Fairness recently reported that billionaire families have contributed close to $2 billion to federal elections in 2024 alone, with this sum likely under counted due to the difficulty of tracking dark money. These contributions further erode transparency in campaign financing, allowing ultra-wealthy donors and industries to shape policy agendas behind closed doors.

Public Citizen has called on the FEC to act decisively before the election to prevent further “corruption of democracy” by unchecked special interest money. Advocates say the case against Coinbase underscores the urgent need for strict enforcement of campaign finance laws and greater transparency requirements. The lack of accountability, Public Citizen argues, has allowed companies like Coinbase to circumvent existing regulations designed to prevent federal contractors from exercising undue influence over the election process.

“The time to hold campaign finance violators accountable is now,” Claypool reiterated. Public Citizen’s research advocates for a fundamental overhaul of campaign finance law enforcement, pointing to Coinbase’s donations as a case study in how special interests are exploiting legal loopholes to drive policy decisions. Without immediate reform, they warn, the interests of billionaires and major corporations will continue to eclipse those of everyday voters, casting a shadow over the democratic process.

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