Fairshake supports candidates committed to ensuring that the United States becomes the home of the next generation of internet innovators. If the broader open blockchain economy is to fully realize its potential in the United States, it is crucial to provide blockchain innovators with the ability to develop their networks within a clearer regulatory and legal framework.
Authored by: Wu Tianyi, DeThings
On July 23, according to the FEC official website, the blockchain group FairShake has become the largest Super PAC in this election cycle, raising over $200 million. According to CoinDesk, the fund has supported over 20 congressional candidates to win their primaries in the 2024 election. The majority of the funds are managed through a coordinated set of PACs under Fairshake. The companies behind Fairshake PAC and its affiliates have refused to answer questions about their origins or ongoing relationship with the organization.
PAC stands for Political Action Committee, an organization that collects and uses funds to support or oppose political candidates. PACs typically operate within specific donation limits and reporting requirements, and operate within donation limits for individuals and entities. They can also make direct contributions to candidates' campaigns.
On the other hand, Super PACs have the ability to raise and spend unlimited funds but are not allowed to make direct contributions to candidates or political parties.
Fairshake PAC was jointly created by over a dozen cryptocurrency companies in 2023 and has become one of the highest-spending PACs in the 2024 election cycle. Cryptocurrency-friendly venture capital firm Andreessen Horowitz, cryptocurrency exchange platform Coinbase, veteran venture capitalist Ron Conway, venture capital executive Fred Wilson, tech executives Cameron and Tyler Winklevoss, and cryptocurrency solutions company Ripple have all made donations to Fairshake.
Currently, Fairshake PAC is openly "influencing" the American political scene. Kara Calvert, Coinbase's head of U.S. policy, has stated that Coinbase is committed to "educating" members of Congress so that "when they are asked about cryptocurrency in city hall, or when they are asked about cryptocurrency by Fairshake or any other organization, they better know what they are talking about."
Representing various cryptocurrency organizations, Fairshake PAC and its supporters are no longer content to remain behind the scenes. Cryptocurrency practitioners and enthusiasts are poised to elect a president for themselves:
"Fairshake supports candidates committed to ensuring that the United States becomes the home of the next generation of internet innovators.
If the broader open blockchain economy is to fully realize its potential in the United States, it is crucial to provide blockchain innovators with the ability to develop their networks within a clearer regulatory and legal framework."
Any discussion of effective altruism has disappeared
Cryptocurrency first entered the political stage in 2021, a year when cryptocurrency lobbying activities saw a significant increase. This was due to the lockdown sparking interest in the virtual economy and get-rich-quick schemes, leading to mainstream exposure, political recognition, and frenzied valuations for various aspects of the industry (Bitcoin, alternative currencies, NFTs, and blockchain). The newly established Biden administration had already turned its attention to cryptocurrency regulation, with the SEC filing securities charges against Ripple in February of that year, while also approving the listing of cryptocurrency exchange Coinbase. One of the company's largest investors, the prominent venture capital firm Andreessen Horowitz, poured substantial funds into other cryptocurrency participants and launched an active lobbying campaign to protect the industry from tax reporting and anti-money laundering regulations—most importantly, to keep it outside the supervision of the SEC.
The results soon followed: before passing in November, Biden's infrastructure bill included extensive tax reporting requirements for Bitcoin miners, but these requirements were significantly weakened due to aggressive lobbying efforts.
Members of the Biden administration and members of Congress (regardless of party affiliation) such as Senators Kirsten Gillibrand and Cynthia Lummis, were "entertained" by several cryptocurrency entities including Grayscale, Blockchain Association, Digital Chamber, and BTC Inc., and proposed a bill during the cryptocurrency crash in the summer of 2022. This bill would achieve the lobbyists' goal of transferring governance away from the SEC and exempting certain tax requirements for digital assets, such as capital gains tax.
An important lobbyist in this process was former FTX founder Sam Bankman-Fried, who, after receiving cash from SBF, proposed a more lenient bill that would also place cryptocurrencies under the supervision of the Commodity Futures Trading Commission.
However, after FTX collapsed at the end of 2022, it was discovered that as one of the biggest spenders in the U.S. election at the time, SBF's main job every day was to cover up a Ponzi scheme, and all politicians who shook hands with SBF received "extra attention," causing the enthusiasm of the cryptocurrency industry for handouts to wane. The entire industry was already feeling the pain from the impact of interest rate hikes and the misconduct of companies like Terraform Labs and Celsius (as well as eager lobbyists), and seemed ready to temporarily retreat, as evidenced by the noticeable lack of cryptocurrency advertisements during the 2023 Super Bowl.
AI and Web3 Join Forces
After FTX's collapse, the Biden administration began to pursue every major cryptocurrency company and achieved some significant legal victories in the process—for example, Binance, once the world's largest cryptocurrency exchange, collapsed completely due to U.S. and international lawsuits. (Its former CEO, Zhao Changpeng, was forced to leave the company and the cryptocurrency industry, and was sentenced to 4 months in prison.) On the day after the lawsuit against Binance, the SEC also sued the largest U.S. cryptocurrency exchange, Coinbase, accusing it of acting as an unregistered securities firm— if this lawsuit is successful, it could completely destroy Coinbase's business model.
But a few weeks after SBF's collapse, another seed of the cryptocurrency lobbying group's resurgence was planted: the launch of ChatGPT.
As this impressive chatbot became one of the fastest-growing applications in history, cryptocurrency brothers and their investors noticed that consumers and professionals were rapidly adopting the technology, and realized they had an opportunity to build a natural alliance. The CEO of ChatGPT's parent company OpenAI is also a cryptocurrency enthusiast and holds shares in WorldCoin, a biometric cryptocurrency project supported by Andreessen Horowitz.
Thriving AI startups and companies also need a significant amount of infrastructure to handle their resource-intensive technology— and financially troubled cryptocurrency miners have a large amount of idle infrastructure, including data centers, cooling systems, and energy connections, which are necessary for companies to keep up with OpenAI's progress. Financially troubled digital asset experts found that they could capitalize on the hype surrounding AI by integrating technology into cryptocurrency processes, and the values of these so-called AI tokens did indeed soar, just like all other companies related to AI today.
But beyond material interests, cryptocurrency enthusiasts and AI proponents have a more important commonality: a desire for unrestrained growth and a disdain for regulatory burdens.
Those who practice effective accelerationism believe that any slowdown in AI development poses a danger to the mission of advancing life-changing AI, which can lead humanity to new frontiers and earn substantial money for its practitioners. They advance under the slogan of "technological optimism manifesto," which encourages all technology to develop unhindered—without government intervention or regulation.
The boldest supporters of Bitcoin and cryptocurrency, including Coinbase's Brian Armstrong, also subscribe to this belief. This has also changed the way they lobby.
As a result, cryptocurrency activities took a sharp turn to the right. The Biden administration's crackdown on cryptocurrency and attempts to formulate guidelines for artificial intelligence have sparked anger in both industries, with technologists yearning for a thorough change— a more liberal, generally hands-off change.
From pawns to players
In August 2023, while Coinbase launched the "Stand With Crypto" campaign, Brian Armstrong announced that he and his company would donate to the Super PAC Fairshake.
Fairshake PAC thus entered the American political stage, with its chief spokesperson and organizer being Josh Vlasto, who previously served as an assistant to the current Senate Majority Leader and former Governor of New York.
While running Fairshake, Vlasto also coordinates the billionaire-backed "Facts for Peace" organization, which was established after October 7th as a pro-Israel organization aimed at shaping the information environment surrounding the Gaza War. In the initial months of the war, "Facts for Peace" was one of the largest advertisers online, spending nearly $500,000 on targeted ads to counter criticism of Israel online.
The massive spending on cryptocurrency in this election year has been boosted by the recent surge in virtual currency. The price of Bitcoin soared to a historical high of $73,000, partly due to a slowdown in mining, which limited supply. (Currently, the price of BTC is $69,000.)
The Biden administration has fueled this market rebound, helping donors who are now spending money on campaigns to make a fortune. However, SEC Chairman Gary Gensler remains staunchly opposed to cryptocurrency. Therefore, with its substantial funds, Fairshake PAC carefully selects candidates, removes politicians critical of the industry, and nurtures new allies in both parties to replace them.
One of the most notable instances of influence occurred in March this year, when Democratic firebrand Katie Porter raised over $30 million in campaign funds, with a significant chance of winning a Senate seat in California. However, Porter followed Elizabeth Warren's political path and played a significant role in Harris's confrontation with banks, leading Fairshake to identify her as a potential "anti-crypto ally."
During the California primaries, Fairshake spent over $10 million to weaken Porter's young voter base. Banners hung over Hollywood and trucks on the Walk of Fame were filled with sharp comments about Porter, promoting her misleading voters to accept bills favorable to big businesses. Ultimately, about a third of Porter's campaign funds were hedged by Fairshake, leading her to fall behind her Democratic colleague Adam Schiff and fail to advance to the fall general election.
Utilizing Republican Control of the Senate
Whether cryptocurrency advertising in a large state like California has influenced primary results is debatable, but Fairshake is indeed attempting to shift the Senate under Republican control to gain more influence in the House.
Republicans generally lean towards relaxing cryptocurrency regulations, so the task of these PACs is to gain a stronger foothold within the Democratic Party. Ripple, Andreessen Horowitz, and Coinbase, the largest donors to Fairshake, have donated over $1 million to the House Majority PAC, which is controlled by House Minority Leader Hakeem Jeffries (D-NY). According to campaign finance analysts at Open Secrets, Coinbase has also donated $500,000 each to the Republican Senate Leadership Fund and the Democratic Senate Majority PAC.
Two races in particular symbolize how cryptocurrency PACs are choosing to support friendly Democrats in crowded open seats.
In Alabama's new majority-black 2nd Congressional District, which is about to enter the Democratic primary runoff, Shomari Figures' support is expected to surpass his opponent's due to the $1.7 million in campaign funds provided by the "Protect Progress" organization.
In Texas's 32nd District, Julie Johnson recently won the contentious Democratic primary, replacing Colin Allred, who is running for U.S. Senate. Johnson has also benefited from cryptocurrency funding.
Like Adam Schiff, Figures and Johnson have carved out a dedicated section on their campaign pages to explicitly signal to Super PACs that they are seeking financial support from the industry. However, these moves seem to be of little concern to voters, as cryptocurrency was not listed as a top 20 priority in issue surveys.
In some campaigns, cryptocurrency groups don't need to spend any money to influence politicians' behavior. Fairshake has stated that it still plans to participate in Senate races in Michigan and Maryland, but has not yet taken sides. This imminent threat has already affected candidates' positions.
In the Democratic primary in Maryland, Democratic Congressman David Trone and Prince George's County Executive Angela Alsobrooks have both expressed an open attitude towards cryptocurrency, despite not taking a strong stance previously. Trone co-signed a letter with cryptocurrency critic Elizabeth Warren last year, calling for stronger enforcement, but has recently been echoing industry views. Trone stated that he believes in legal certainty for cryptocurrency companies so that the United States does not "fall behind in the global race for technological progress and economic competitiveness."
Alsobrooks also greatly appreciates blockchain technology, emphasizing that it "can help all Americans, including traditionally underserved communities, have the opportunity to create generational wealth for their families."
This phenomenon is not only evident in the electoral arena but also directly in messages sent to current officials. According to CNBC, a dark money non-profit organization called the Cedar Innovation Foundation "received significant funding from cryptocurrency industry participants" and ran ads encouraging cryptocurrency enthusiasts to demand that Ohio Senator Sherrod Brown oppose SEC Chairman Gary Gensler and Senator Elizabeth Warren.
Businessman and investor Ben Horowitz wrote a blog post in December condemning "misleading and politicized regulation" and criticizing lobbyists who "often run counter to an optimistic technological future," and announced that the company would pursue its political interests in this way: "If a candidate supports an optimistic technological future, we support them. If they want to stifle important technologies, we oppose them. These important technologies include artificial intelligence and decentralized technologies from the blockchain/cryptocurrency/web3 ecosystem."
It is clear that relaxing regulations has become a common demand in the rapidly developing tech sector. This sentiment peaked after Trump declared at the 2024 Bitcoin Conference that he would "fire the current SEC chairman as soon as he takes office," and Trump also transformed into a "crypto savior." However, at the same time, an interesting fact is that Fairshake has raised $202 million, quietly surpassing the MAGA led by Trump.
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