Amid the sea of American flags and ubiquitous blue signs at the Democratic National Convention in Chicago this week, skulked Jonathan Padilla, the “crypto guy.”
Padilla, wearing a baseball cap and a flashy pineapple shirt, walked the halls of the convention, talking to anyone who would listen about crypto policy. In a selfie posted to Facebook, he posed with his arm around Delaware Senator Chris Coons. “Senator Coons now knows everything about crypto,” the caption reads.
Padilla is happy with his new “crypto guy” moniker, bestowed upon him by his fellow DNC delegates, which he sees as an implicit recognition that cryptocurrency has risen to the political agenda. “Four years ago, crypto was a non-issue and nobody was talking about it,” Padilla says. “But now President Trump is talking about it at major conferences. And it’s being discussed by some of the highest-ranking Democrats.”
Padilla is the founder of crypto marketing firm Snickerdoodle Labs and was previously a resident blockchain whisperer at PayPal. He is also one of the organizers of Crypto4Harris, a coalition of Democratic-leaning members of the crypto industry that aims to encourage Kamala Harris to support crypto-specific legislation and show that the industry “is not monolithically Republican,” according to Padilla.
On August 14, Crypto4Harris hosted a virtual town hall meeting attended by leading Democrats, including Senate Majority Leader Chuck Schumer, who said he “believed in the future of crypto.” The group has also “made progress,” Padilla claims, with “finance and policy people” in the Harris camp.
The group’s accession to the Harris team reflects a sea change in attitude toward crypto among U.S. politicians, who seem to have accepted that there’s a bloc of voters who will cast their ballots based solely on which candidate will send their investments to the moon. (You know, forget immigration, healthcare, and all the rest.) And that’s without even mentioning the hefty donations being thrown around by crypto companies.
Following a surge in crypto prices in 2024, crypto companies have invested an “unprecedented” amount of money into influencing the outcome of this year’s U.S. election, according to an analysis by nonprofit consumer organization Public Citizen. Despite their relatively small size from a revenue perspective – and the continued scarcity of use cases outside of financial speculation – crypto companies account for 48 percent of all corporate contributions this election cycle.
The crypto industry has poured some money into the 2020 race. But there’s a new urgency and power to the effort to intervene in the 2024 campaign. “The industry believes this election is existential,” said Veronica McGregor, chief legal officer at crypto wallet company Exodus, speaking in a personal capacity as an industry veteran. “Regardless of who comes into power, changes need to happen for our industry to thrive as it should.”
The majority of the crypto industry’s political donations are fueled by a trio of affiliated super political action committees (PACs): Fairshake, Protect Progress, and Defend American Jobs. These organizations can’t donate directly to political candidates, but they can spend money freely to promote those making the right kind of cooing noises about crypto.
Under the Biden administration, crypto companies have been battered and dragged into court by U.S. financial regulators in what they see as grossly unfair. But through super PACs, crypto companies hope to install politicians in power who will support bespoke crypto legislation that will end the debate over how crypto should be classified and what regulatory rules should apply.
The largest of these super PACs, Fairshake, has raised more than $200 million, a larger sum than any other super PAC, crypto-specific or otherwise. Major donors include crypto companies Coinbase and Ripple, pro-crypto venture capital firm a16z, and an investment firm founded by Cameron and Tyler Winklevoss, founders of crypto exchange Gemini.
The largest of Fairshake’s donors, Coinbase, which contributed $45 million to the pot, is the subject of a formal complaint with the Federal Election Commission. The complaint was filed jointly by Public Citizen and software developer Molly White, creator of Follow the Crypto, a project that tracks donations from the crypto industry. The complaint alleges that Coinbase violated campaign finance laws by contributing to Fairshake while negotiating a deal to become a federal contractor.
Coinbase declined an interview request, instead citing public comments from Paul Grewal, the company’s chief legal officer, who disputed the company’s characterization as a federal contractor on the grounds that the service it provides is not technically funded by tax revenue. “To us, it looks like Coinbase is trying to find a loophole where none really exists,” White said.
