Cryptocurrency companies are increasing political spending and Donald Trump promises to create a “crypto-strategic reserve,” while warning of “deep risks” in American politics as Donald Trump oversees regulatory withdrawals.
The situation reads a report from the Centre for Political Accountability (CPA), a nonprofit advocating for corporate political disclosure, “indicating the deep risks that unchecked companies political spending present, especially within the volatile and often unpredictable cryptocurrency industry.”
“The aggressive push for deregulation, combined with opaque and inexplainable political contributions, not only raised the red flag among regulators, but also erod investors’ trust and public’s trust in the long-term viability of these companies.”
CPA definitions say that cryptocurrencies “often shortened to “crypto”” are financial technology that emerged in the early 2010s, with the aim of circumventing traditional central authorities like banks to allow decentralized peer-to-peer transactions recorded in encrypted digital ledgers.
“Some public companies operating in these areas are beginning to engage in significant political spending at both national and state levels, with over $134 million in the 2024 election alone,” the new report states.
After the election, the CPA was one of the “many …public companies making $1 million donations to Trump’s first fund.” With Trump in power, the Securities and Exchange Commission (SEC) dropped a lawsuit against both Kraken and Coinbase, which previously allegedly “an unregistered stock exchange.”
Such a move was confirmed as SEC chair under Joe Biden following his departure on Jan. 20th Gary Jensler’s inauguration day, but Trump vowed to remove it. Commissioner Caroline Crenshaw, confirmed in Trump’s first term, but was set to serve a four-year second term, like Gensler, who opposed the interests of the code, but is now being exchanged.
“Crypto Money played such a key role in the election,” said CPA president Bruce Fried. “Look at some of the candidates who have come down to where there were heavy code spending.
“Look at the case of (progressive representative and cryptography skeptic) Katie Porter in California’s (US Senate) primary. Adam Schiff (a more crypto-friendly Democrat) benefited from it. He was the chairman of the Senate Banking Committee (and crypto-skeptic), and he spent heavily on Sherrod Brown (the incumbent Democrat lost in Ohio).
“And you look at the SEC, look at the surveillance and regulations of crypto, and some of the enforcement actions brought under Gary Gensler on crypto are now being removed. So you can see a very large impact in the short term of crypto money.”
Benshavtsin, assistant director of research and primary report author at CPA, said in 2024 that the crypto company “blew away all other industries in terms of external spending.”
Trump, who launched his own crypto venture this month, wrote on a social media platform that “enhances this key industry after years of corrupt attacks to ensure that the United States is the crypto capital of the world.”
On Thursday, Trump signed an executive order to establish a reserve. On Friday, he held the White House “Cryptocurrency Summit,” followed by a reception hosted by Coinbase.
Schaffzin and Fellow report author Jeanne Hanna, Vice Chairman of CPA Research, note that Trump has appointed South African entrepreneur and crypto investor David Sacks as “Crypto Czar.”
Sack reportedly “sold his personal crypto holdings,” but the author wrote, “We still don’t see if he will sell from the investment company either.
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“This fraud will do nothing to alleviate concerns about the nature of cryptocurrency salary increases.”
He was asked that if Kamala Harris had become president, the code outlook would not have been so concerned. “This spending was incredibly bipartisan… (but) like so many things over the past six weeks (Trump has come to power), I think the pace of what’s unfolding in the crypto industry was accelerated by some of the executive appointments Trump has been appointed in this space. But I think the overall regulatory environment through Congress may not have been dramatically different under Harris compared to Trump.”
Freed said: “In Trump’s case, you have a more trading approach to politics and policy making. I think that’s very important (crypto). If you look at the money poured into Sherrod Brown, for example, you’re basically going to want to free the crypto from surveillance and regulation.
“There was clearly a lot of interest in what happens in the SEC… Crypto clearly never wanted to be disturbed by surveillance or regulations.”
To explain the dangers of code in politics, the CPA report cites recent events in Argentina where Javier Mairay, like Trump, promoted “a fraud coin called $46 billion, almost $4.6 billion, which lost all its value.”
“President Mairi quickly removed his support for the token after the facts, but his political opposition has filed more than 100 fraud complaints with the government and urged the judge to begin an investigation,” he said, urging Mairay to be fired each.
“This scandal only helps to further highlight the systematic risks surrounding cryptography,” the CPA author writes.
Schaffzin said Argentina should stand as a warning to Trump’s administration, saying, “For ordinary consumers who don’t know the pitfalls of this product, it’s extremely dangerous to preach this from the top from an executive who doesn’t really understand the mechanisms of crypto.
