Tuesday, November 26

How tech bros bought ‘America’s most pro-crypto Congress ever’

Bernie Moreno was a political unknown until he declared his intention to run for the Senate in April 2023. He used to work as a car salesman in the Cleveland area, and his only political experience was a failed 2022 campaign for Ohio’s other Senate seat.

Since then, Moreno has achieved the hitherto unimaginable.

Moreno upset Democratic incumbent Senator Sherrod Brown on November 5, in the election that carried Donald Trump back into the White House. Brown was elected to the House in 1992, then won a Senate seat in 2006 and has been the leader of the influential Banking Committee since 2021.

It was no coincidence that Moreno went from being an obscure Ohio businessman to being a well-known political figure. As part of a highly focused attempt to elect sympathetic candidates and, perhaps more crucially, to eliminate its detractors, the bitcoin sector contributed $40 million to his campaign. Republicans took control of the Senate by flipping many Senate seats, including Moreno’s.

According to records from the Federal Election Commission, PACs with ties to the cryptocurrency business and others raised a total of over $245 million. Public Citizen, a nonprofit watchdog, claims that almost half of all corporate funds that went into the election came from cryptocurrency. Coinbase this year founded the advocacy group Stand With Crypto Alliance, which created a grading system for House and Senate contests nationwide to help decide how best to allocate funds.

The election was viewed by cryptocurrency executives, investors, and enthusiasts as crucial for a sector that has been struggling to mature over the last four years. According to Stand With Crypto, the industry will have unparalleled influence over the legislative agenda as nearly 300 pro-crypto lawmakers will be elected to the House and Senate.

This cycle, the crypto political lobby was so successful because it simplified complex issues, such as campaign finance: raise a lot of money from a small number of donors and purchase ad space in battleground areas to either support or disparage candidates who do not embrace cryptocurrency. Additionally, candidates have to be viewed as somewhat binary: either supportive of the sector or not.

Executives from cryptocurrency companies quickly rallied and successfully worked out how to distribute their money throughout the nation using an advanced ad engine. They also learned from the mistakes made by big tech. In order to avoid dealing with their opponents in the coming years, the cryptocurrency business decided to target them before the election instead of spending hundreds of millions of dollars lobbying lawmakers after the election.

Silicon Valley heavyweights like Marc Andreessen, Ben Horowitz, and David Sacks interrogated Moreno for more than a year about blockchain technology, digital asset policy, and the changing landscape of international banking.

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Moreno described the several meetings that dated back to his primary campaign, saying, “They didn’t just jump in head first.” A great deal of trust has to be established.

Moreno also met with Faryar Shirzad, the policy leader, and Brian Armstrong and Fred Ehrsam, the founders of Coinbaseco. CNBC’s request for comment on the meetings via Coinbase was not answered by Armstrong or Ehrsam.

The Securities and Exchange Commission has been suing Coinbase, the biggest digital asset exchange in the United States, for more than a year. In the 2024 cycle, the business was the cryptocurrency kingmaker, contributing over $75 million to Fairshake, a super PAC. This cycle, it was the industry’s highest spending committee and only contributed to congressional candidates that supported cryptocurrency. Almost all of the general election races that Fairshake supported were won by its candidates.

Following Moreno’s triumph, Coinbase’s Armstrong wrote on X that being anti-crypto is just terrible politics.

SEC Chairman Gary Gensler has sued key cryptocurrency companies like Coinbase and Ripple for allegedly selling unregistered securities and has avoided collaborating with businesses to create new specialized regulations, despite the fact that the price of bitcoin has increased by almost six times in the last four years.

Sen. Brown, meanwhile, joined Sen. Elizabeth Warren, D-Mass., who is vehemently opposed to cryptocurrency, in accusing it of aiding terrorist groups, such as Hamas. Following the collapse of cryptocurrency exchange FTX in late 2022, Brown became increasingly outspoken in his calls for industry crackdowns.

When FTX was on the verge of going bankrupt, Brown retweeted a Senate Banking Committee post on November 10th, describing the incident as a stark reminder that cryptocurrencies can crash and affect customers and other components of our financial system.

Spending heavily on Republicans and Democrats vying for important seats, the bipartisan Fairshake won all but three of the general election contests. Fairshake-affiliated PAC Protect Progress contributed over $10 million each to Democratic Senate candidates in Arizona and Michigan. They both prevailed. Another PAC connected to Fairshake, Defend American Jobs, spent almost $3 million to back Republican Jim Justice in West Virginia, who will replace Democratic Sen. Joe Manchin when the next session begins in 2025.

Fairshake paid almost $10 million on commercials against Democratic Representative Katie Porter in California, which cost her a Senate race.

I thought, “What on earth is Fairshake?” The New Yorker was told by Porter.

How tech bros made their pick

In an interview with CNBC, Moreno said that those evaluating him wanted to know what he would do differently from the current government and regulatory framework.

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“They took that same discipline with me,” Moreno added, “and they know how to vet investments and know how to vet people.”

His creation of Champ Titles, a blockchain startup that digitizes auto registration and ticketing, was beneficial.

According to Moreno, they didn’t want to invest time, energy, and resources in someone who would ultimately disappoint.

A representative for Horowitz and Andreessen, who co-founded a venture capital business with their names on it, chose not to respond. CNBC’s request for an interview with Sacks, the founder of Craft Ventures, was not answered.

In the spring, Shirzad of Coinbase had breakfast with Moreno in Washington. Shirzad told CNBC in an interview that while Moreno was not an expert on the specifics of the policy concerns he would be addressing, he was well-versed in crypto technology and its potential applications.

Shirzad remarked, “It was a really great meeting of minds between him as a kind of business guy who saw the potential of the technology and me as a policy guy.”

David McIntosh, the head of the Club for Growth, a conservative group that focuses on American economic issues, and an early supporter of Moreno’s Senate campaign, said that Moreno was broke after devoting all of his resources to a difficult and costly primary. According to McIntosh, Fairshake was essential to Moreno’s campaign beginning in the summer.

According to McIntosh, Moreno’s victory over Brown sent a clear message to Washington that voters will back candidates who favor blockchain.

McIntosh pointed out that the Club for Growth, through its several super PACs, including the Bitcoin Freedom Fund, spent $6.5 million to assist Moreno with primary advertising.

A number of attempts for response from Brown’s office were not answered.

Vice President-elect JD Vance has an open Senate seat in Ohio that will be filled by a special election in 2026, and Brown told Politico he hasn’t ruled out running for it.

According to Shirzad, Moreno profited from positioning himself as the candidate for change, whereas Brown turned into a supporter of the status quo.

According to Shirzad, the theme of cryptocurrency is one of transition. In addition to younger voters, it also appeals to those who wish to make changes in their lives.

Although the super PAC has already gathered $78 million for the 2026 midterm elections, Fairshake declined to comment on whether it would spend money to stop another Brown Senate race.

We stuck to our core strategy from Day 1, supported pro-crypto candidates and opposed those who played politics with jobs and innovation, and won, Fairshake told CNBC in a statement.

Most pro-crypto Congress ever

The past two election cycles featured spending from the now-bankrupt crypto exchange FTX and its founder Sam Bankman-Fried, who wassentenced to 25 yearsin prison in March for stealing more than $8 billion worth of customer money through FTX.

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This year s contributor list was more robust but saw large sums of funding come from companies that have been at odds with SEC Chair Gensler for years. This includes the blockchain behemoth Ripple Labs and Coinbase. Prominent venture fund Andreessen Horowitz, which has a large portfolio of crypto companies, was one of the other primary contributors.

Many well-known cryptocurrency figures also made substantial contributions in 2024.

FEC filings showCameronandTylerWinklevoss were among the largest individual crypto donors this election cycle,giving a combined $10.1 million. Top executives from Ripple contributed millions, led by billionaire founder Chris Larsen, who gave around $12 million this cycle.

Coinbase CEO Armstrong gave over $1.3 million to a mix of PACs including Fairshake and JD Vance for Senate Inc. He also gave directly to Democrats and Republicans running for House and Senate seats. Coinbase Chief Legal Officer Paul Grewal attended at least two Trump fundraisers, includingone in Nashville, Tennessee, on the sidelines of the biggest bitcoin event of the year.

Kraken ChairmanJesse Powelldonated over $1 million to the Trump campaign.

Other individual crypto contributors include ex-Bitfinex strategy chiefPhil Potter(over $1.6 million),Multicoin Capital sKyle Samani($878,600), Paradigm co-founderFred Ehrsam($735,400), Union Square Ventures partnerFred Wilson($1,4 million), Paxos CEOCharles Cascarilla($198,500),BitGo CEOMike Belshe($119,825),Solana co-founderAnatoly Yakovenko($67,100), and Xapo Bank founderWences Casares($374,899).

This week,Armstrong reportedlymet with the president-elect to discuss appointments. Within a day, conversations swirled about the potential for the White House sfirst crypto czar. By the end of the week, SEC Chair and longtime crypto foe Gensler, whose term doesn t expire until June 2026, announced he was retiring on inauguration day.

One of Trump s promises to his crypto fans on the campaign was that he would fire the SEC head and choose crypto-friendly regulators if elected. Gensler may have taken a look at the pressure that faces him across Washington and decided it just wasn t worth trying to stick it out.

Welcome to America s most pro-crypto Congress ever, Armstrongwrote on Xon Nov. 5.

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