Crypto Super PAC is targeting races in Ohio and Montana that could impact the Senate

Fresh off spending more than $10 million to help defeat Rep. Katie Porter, a progressive Democrat, in California’s open Senate race, the crypto industry’s big new super PAC has identified its next political targets for this fall. At the top of the list are two races with the most threatened Democrats up for re-election, in Ohio and Montana.

The crypto industry and its associated super PACs, which entered 2024 with more than $80 million in the bank, aim to use their financial and political power to both elect allies and ultimately shape a favorable set of rules in Congress to give.

“How do people understand that crypto is real – that it is a real problem?” said Kara Calvert, head of US policy at Coinbase, one of the largest crypto trading platforms. “When you have $85 million behind an issue, that’s pretty real.”

Josh Vlasto, a spokesman for Fairshake, the largest of a group of three new crypto super PACs, said the super PAC had made the decision to play in four Senate races this year: the Democratic primaries in Maryland and Michigan, as well as the general elections in Ohio, where Senator Sherrod Brown is up for re-election, and Montana, where Senator Jon Tester faces a serious challenge.

“We will have the tools to influence race and the composition of institutions at every level,” Mr. Vlasto said. “And we will deploy these assets strategically to maximize their impact to build a sustainable, bipartisan crypto and blockchain coalition.”

Mr. Brown and Mr. Tester are the only two incumbent Senate Democrats running nationally in states that former President Donald J. Trump won in 2020, and Democrats must win both for the party to have any hope of maintaining their slim majority.

Mr. Vlasto said the crypto super PAC has not yet decided whether to oppose or support Mr. Brown and Mr. Tester. But the signs of where Fairshake is headed are clear.

Mr. Brown, as chairman of the Senate Banking Committee, has been a public skeptic of what he has called “crypto abuse.” He said that at one hearing “crypto appeals to crime organizations and scammers.” One of Brown’s possible Republican opponents, Bernie Moreno, was one crypto booster in the Cleveland area. The GOP primaries are later this month.

The announcement that the industry plans to spend big on the Ohio race amounts to a warning shot. Two people familiar with the industry’s plans said all lawmakers running in targeted races, as well as in some other districts and states, would soon receive industry-related questionnaires asking them to document their positions on crypto issues. Such questionnaires are not uncommon for special interest groups, but can be burdensome for the politicians asked to complete them.

“I wouldn’t say there’s a target on their backs,” Ms. Calvert said of Mr. Brown and Mr. Tester. “What I would say is, there is, I think, an opportunity, and there is an important period between now and the election where many policymakers have to make a decision: Do they want clear rules? and consumer protection? Or do they not?”

Coinbase, which has contributed more than $23 million to the new crop of crypto super PACs, is one of the three major players in the sector, along with Ripple Labs and Andreessen Horowitz, which hold the bulk of the super PAC funds for their account. The industry also has a nonprofit, Stand With Crypto, which has highlighted that 52 million Americans own crypto, with almost equal shares of Democrats, Republicans and independents.

The increasing political activity comes as the industry seeks federal regulation in part to give the digital currency greater legitimacy.

Mr Tester, who is a member of the Banking Committee, has also been a crypto skeptic. He continued NBC’s “Meet the Press” in December 2022 that crypto “couldn’t have passed the smell test for me.” “If we regulate it,” Mr. Tester added in the interview, “it could give people the opportunity to think it’s real.”

After Fairshake spent $10 million against her, Ms. Porter, a close ally of Senator Elizabeth Warren of Massachusetts, a Democrat and a crypto industry skeptic, said her California race had been “manipulated by billionaires.”

Mr Vlasto responded by saying: “Thank you, Katie Porter, for giving Fairshake credit for your loss.”

In addition to advertising the super PAC, Stand With Crypto organized an election rally in Los Angeles with rapper Nas and Coinbase CEO Brian Armstrong.

“By 2024, it will become clear that anti-crypto is bad politics,” Mr. Armstrong said there, according to the group. “Go out and vote to make your voice heard.”

The 2024 elections are not the first to see a huge influx of cryptocurrency. In 2022, Sam Bankman-Fried, the founder of FTX, a cryptocurrency exchange, poured tens of millions of dollars into congressional races. FTX failed spectacularly, wiping out billions of dollars, and Mr. Bankman-Fried, who had appeared on Capitol Hill and even attended a House Democratic retreat, was later convicted of fraud and conspiracy.

In addition to these Senate contests, the new crypto super PACs have already entered some recent Democratic House primaries, as well as some Republican races. Fairshake’s two affiliated crypto PACs are called Protect Progress, which focuses on Democratic races, and Defend American Jobs, which plans to be involved in Republican races.

Protect Progress spent $1.7 million boosting Shomari Figures into an open seat in the Alabama House (he promises on its website to “embrace the new landscape around digital assets, such as cryptocurrency”) and nearly $1 million on behalf of Julie Johnson in Texas (who says on its website that “Americans can benefit from crypto innovation”). Ms. Johnson won her primary, and Mr. Figures finished first in his and headed to a runoff.

Mr. Vlasto said that in deciding who to support, Fairshake and its affiliates will “evaluate a candidate’s leadership on issues important to the crypto community, a candidate’s viability, the importance of the election and our ability to influence the race.”

He said the group had also decided to run in two current Democratic Senate primaries but had not yet chosen sides.

In Michigan, Rep. Elissa Slotkin is the leading Democratic candidate, and she sits on the House Agriculture Committee, which has also considered cryptocurrency regulation. Her opponents are Nasser Beydoun, a businessman, and Hill Harper, an actor.

In Maryland, Rep. David Trone, a wealthy former businessman, is running against Prince George’s County Executive Angela Alsobrooks.