(Bloomberg) -- The crypto industry, whose hostility to the Biden Administration have led some major participants to publicly endorse Donald Trump, is spending millions through a pair of super PACs to shape the Democratic Party by intervening in congressional primaries.
The pro-crypto political action committee putting the most money behind Democrats is Protect Progress, which has spent over $13 million on US congressional campaigns.
Protect Progress, along with affiliated pro-crypto super PACs Fairshake and Defend American Jobs, have raised $170 million in total to spend on the 2024 campaign cycle, according to Federal Election Commission filings. Top donors include crypto industry titans Andreessen Horowitz, Coinbase Global Inc. and the Winklevoss brothers that run the Gemini exchange.
The overarching goal of the super PACs is to push for what industry participants have called greater regulatory clarity. Critics of the Biden administration have accused the US Securities and Exchange Commission of acting in bad faith by regulating through enforcement.
Unlike regular political action committees, groups such as Protect Progress can spend and receive an unlimited amount of contributions from corporations, individuals and other super PACs, even if they’re not affiliated with each other. The main limitation is that super PACs are not allowed to directly donate to or coordinate with candidates or their campaigns.
Whereas the group’s two siblings have spent $16 million supporting crypto-friendly Republican candidates and about $14 million sinking the campaigns of anti-crypto Democrats Katie Porter and Jamaal Bowman, Protect Progress has spent more than $13 million to support pro-crypto Democrats, according to FEC data. FairShake has also spent about $600,000 supporting Democrats.
Fairshake and its two affiliates are run by political strategist Michael Carcaise. In 2021, he set up a super PAC called GMI PAC that raised $12.5 million, including $2 million from Sam Bankman-Fried, the disgraced co-founder of FTX, and $1.5 million from former FTX executive Ryan Salame. Carcaise is listed as executive director of Political Campaign & PAC Management and Strategy in a LinkedIn profile.
Josh Vlasto, a spokesman for the three super PACs, didn’t respond to several requests for comment.
GMI itself never directly spent any money on campaigns. It instead sent almost all of its donations to affiliates including Web3 Forward, a former Democrat-focused pro-crypto super PAC. Carcaise was listed as the treasurer of Web3 Forward on the PAC’s FEC filing.
Eight of the 13 candidates that Protect Progress has backed so far have ran or are running in non-incumbent races in districts that have a strong Democrat presence, the data show. That aligns with the strategy once used by Web3 Forward.
Nine candidates endorsed by Protect Progress have won their primaries and now move on to general elections on Nov. 5. The spending has raised tension in some primaries.
Ballots are currently being counted for Arizona’s House District 3 election, where the super PAC spent part of $1.4 million to support candidate Yassamin Ansari with a video campaign advertisement about two weeks before the election. The 30-second long video in Spanish has no mention of crypto.
Ansari’s opponent, Raquel Terán, denounced the spending, saying the super PAC is controlled by Republican donors.
“I’ve never heard anybody at the door bring up crypto,” Terán said in an interview. “That’s all I have to say.”
--With assistance from Bill Allison.
©2024 Bloomberg L.P.
