The Cryptocurrency industry is spending more money than any other to attract California court races

When interest groups are crowded in the north of Orange County with the promotion of a hot congressional competition, a new industry has emerged as a huge financial investment: cryptocurrency.

A political action committee called Fairshake, funded by cryptocurrency companies and their investors, has spent more than any other industry group — nearly $2.8 million — to help Republicans. in the crisis of Rep. Michelle Steel (R-Seal Beach) to retain her seat in Congress.

The same is true of California, where crypto has outpaced any other business interest in a few major competitive races. The industry spent nearly $7 million last month to boost four Republican candidates in Southern California and Central Valley states, federal campaign finance records show.

Republicans have a slim majority in the House, and both parties see California’s midterm races as critical to their path to victory.

A surge in cryptocurrency during such a tight election has the potential to influence which party controls Congress, said Rick Claypool, director of research at Public Citizen, a nonprofit advocacy group.

“This level of spending on elections is something that no other organization is doing,” Claypool said. “There have certainly been commercial campaigns and commercial spending, but nothing on this scale, and nothing out in the open … in a clear and transparent way.”

The House spending spree follows Fairshake’s $10-million campaign in the U.S. Senate this spring, which was designed to oust Rep. Katie Porter (D-Irvine) in the race. Porter finished third, and Democratic Rep. Adam B. Schiff (D-Burbank) now faces his favorite opponent, Republican Steve Garvey.

The crypto industry has spent 2024 covering the airwaves with ads, sending a clear signal to politicians that they could be fired if they don’t support more crypto-friendly legislation in Washington.

Crypto has made up nearly half of political donations by corporate fund users this year, Claypool said. About $130 million spent on crypto in the last three elections is equivalent to 15% of all known business expenses since 2010, when the Supreme Court in its Citizens United decision removed the restrictions on the use of business capital.

Fairshake super PAC’s biggest donors include crypto companies Coinbase and Ripple; Brian Armstrong, CEO of Coinbase; and Bay Area venture capitalists and crypto investors Marc Andreessen and Ben Horowitz.

Cryptocurrencies are virtual currencies, often considered investments, that are traded through private networks rather than through banks.

“No matter how you slice it, it’s going to be the most pro-crypto Congress,” Armstrong said Wednesday in an X post. He said Coinbase will use another $25 million through Fairshake to elect pro candidates -crypto in 2026 midterms.

Steel gets a lot of help from crypto

Fairshake PAC’s $26 million in spending across the US is split evenly between House Republicans and Democrats. In California, the group is more focused on helping the GOP. Fairshake declined to comment on its spending in California.

In addition to the nearly $2.8 million spent on Steel’s behalf, the most of any member of the House, the group spent more than $1.8 million on Rep. Young Kim (R-Anaheim Hills) Orange County, $1.3 million for Rep. David Valadao (R-Hanford) in the Central Valley and $1 million for Rep. Mike Garcia (R-Santa Clarita) Antelope Valley.

Like a super PAC, Fairshake can make independent expenditures on behalf of voters, but it cannot directly contribute to, or coordinate with, their campaigns.

An ad released by Fairshake for Steel this month highlights her record as an advocate for women, but makes no mention of crypto. Meanwhile, the bell attacked his opponent, Democrat Derek Tran, for his cryptocurrency.

The 45th Congressional District has the largest immigrant population outside of Vietnam, and both Steel and Tran are vying for the support of longtime residents of Little Saigon. In another Vietnamese-language columnist this month, Steel sought to tie Tran to Chinese communists like Mao Zedong, criticizing him for having “millions of dollars in cryptocurrency linked to China.”

Tran said he has $145,000 worth of bitcoin, ethereum and other cryptocurrencies on the exchange platform Binance, which was based in Shanghai but is no longer based there.

Only a few congressmen own cryptocurrency; Steel does not have it. His campaign declined to comment.

In surveys by Stand With Crypto, an industry lobbying group that ranks politicians on their crypto positions, both Steel and Tran vowed to support regulations to create clearer rules. The panel concluded that Steel, who voted for three industry-sponsored bills, “strongly” supports crypto, while Tran “very” does.

Orrin Evans, an adviser to Tran, called the use of cryptocurrencies “concerning” and apparently “more about keeping the House of Representatives under Republican control than promoting the importance of crypto to drive innovation.”

Crypto’s role in the California Senate race

During the year, Fairshake dropped more than $10 million on ads that called Porter a fake, an actor and a hypocrite. After Porter finished a distant third behind Schiff and Garvey, the crypto super PAC boasted that his alliance with adviser Sen. Elizabeth Warren (D-Mass.), an anti-industry activist, “ended her career in Congress.”

Porter received an F from the Stand With Crypto lobbying group, while Schiff received an A. The group pointed to a statement on Schiff’s campaign website that called for “comprehensive regulatory frameworks” keeping crypto companies and Web3 in the US Web3 is a private network. is based around blockchains, the public ledgers used to automate every cryptocurrency transaction.

Schiff has since voted against two of the three industry leaders in Washington, but the group has maintained his A rating. He voted in favor of the bill known as FIT21, which is one of the things industry priorities, which would shift some crypto regulations from the Securities and Exchange Commission to a smaller and less aggressive Commodity Futures Trading Commission. The bill passed the House in May.

Crypto Currency for Democrats

Fairshake has also created two other PACs that support politicians from each political party. One PAC, Defend American Jobs, runs for Republicans, and another, Protect Progress, runs for Democrats — including two Californians.

Through Protect Progress, crypto interests have spent more than $500,000 to help Rep. Jimmy Gomez (D-Los Angeles) is running for re-election in the 34th Congressional District, which covers central and northeast Los Angeles, including Boyle Heights and Koreatown.

Gomez is running against progressive Democrat David Kim, who lost to Gomez by six percentage points in 2020 and more in 2022. The crypto lobbying group is the second largest field in the foreign currency race to the country, after the main PAC for the American Israel Public Affairs Committee, federal shows.

Silicon Valley Rep. Ro Khanna has seen around $110,000 spent on his behalf by the same cryptocurrency group.