Why Crypto's Election Spending Spree Signals A Push For Regulatory Overhaul

The 2024 election cycle was a showcase of the cryptocurrency industry’s new, aggressive approach to political influence, and now this investment aims to reap rewards in the form of regulatory changes.

The industry’s massive spending wasn’t just about backing friendly candidates; it was a calculated attempt to reshape the regulatory landscape.

This means the “so what” is that the industry seeks to replace those they view as hostile regulators with policymakers more aligned with its growth ambitions.

This was particularly driven by Coinbase COIN and venture firm Andreessen Horowitz who were the biggest financial backers of the pro-crypto Fairshake super PAC, which spent $173 million during the last election.

The “why” behind such hefty spending is crystal clear: to oust regulators viewed as “overzealous,” like Sherrod Brown (D-Ohio), against whom the PAC spent $40 million alone, and shift the focus from risk mitigation to nurturing the industry’s development.

Coinbase's recent call for President-elect Donald Trump and the new Republican Congress to establish the Commodity Futures Trading Commission (CFTC) as the primary crypto regulator signals a major push for change.

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Emilie Choi, Coinbase's president and COO has made it clear that the company is looking for basic rules for the industry and an end to what they perceive to be a "regulation by enforcement" approach, Politico reported on Tuesday.

The “so what” is that Coinbase and the industry are looking for a future where rules are clear, regulation is predictable and are hoping to have a more favorable environment in the new administration.

While the Biden administration had been critical, particularly following the FTX scandal, Trump’s views have evolved.

He previously dismissed crypto, but he has now embraced the industry as well as stacking his incoming administration with crypto enthusiasts, like Paul Atkins, who will chair the SEC, and David Sacks who will advise on both AI and crypto, signaling a likely paradigm shift in the regulatory environment.

Coinbase’s actions demonstrate a clear understanding that policy isn’t a passive process, but requires active engagement.

As Choi herself said, the industry realized that success “was not going to happen naturally,” prompting them to “mobilize” and “make sure this actually happened."

This is why they have recently funneled a further $25 million into Fairshake.

This aggressive approach is a signal to the political establishment that the crypto industry intends to be a long-term player in the political arena and a major force to be reckoned with.

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