Coinbase's $300M Donations Tied to SEC Case Drop, Senate Demands Answers

Coinbase Global Inc. (COIN) has faced mounting political scrutiny as it reported robust third-quarter earnings, with revenue surging 55% year-over-year to $1.87 billion, according to an earnings summary, and net income reaching $433 million, in a Yahoo Finance report. The exchange's financial performance, driven by a 25% increase in trading volume to $295 billion (noted in the Yahoo report) and a record $747 million in subscription and services revenue (also detailed by Yahoo), has coincided with a heated public dispute with Senator Chris Murphy (D-Conn.), who accused the firm of exploiting "Trump's corruption factory" through political donations and regulatory favors, as covered in a Yahoo Finance article.

The controversy erupted after Murphy linked Coinbase's contributions to Trump's inauguration committee, a $300 million White House ballroom project, to pro-Trump political action committees (PACs) and the Securities and Exchange Commission's (SEC) decision to drop its 2023 lawsuit against the company, according to a Coinotag post. Coinbase's Chief Policy Officer, Faryar Shirzad, dismissed the allegations as "ridiculous," emphasizing that the firm's donations to Fairshake, a bipartisan crypto PAC, supported candidates across the political spectrum, including three of Murphy's new Democratic colleagues (as Reuters and Yahoo later noted). He also noted that inaugural donations are a longstanding tradition, with Coinbase's ballroom contribution routed through the Trust for the National Mall, a nonprofit partner of the National Park Service, per a FinanceFeeds article.

The SEC's case against Coinbase, which alleged the exchange operated as an unregistered securities platform, was terminated in February 2025 under the agency's new leadership, according to the earlier Yahoo piece. Shirzad framed the decision as a correction of "grotesque patterns of bullying" under former Chair Gary Gensler, who had aggressively pursued crypto firms, as reported by Coinotag. The exchange has also highlighted broader regulatory progress, including the July passage of the first federal stablecoin framework (noted in the Yahoo coverage), as evidence of the Trump administration's pro-crypto stance.

Coinbase's financial success underscores its shift from a pure trading platform to a diversified financial infrastructure provider, with $300 billion in custody assets and 80% of U.S. crypto ETF assets under management, according to a PYMNTS analysis. CEO Brian Armstrong described the third quarter as a "strong" period marked by innovation in derivatives, payments, and on-chain applications. The firm's strategy, dubbed the "Everything Exchange," aims to consolidate crypto's core infrastructure under one platform, a vision bolstered by rising stablecoin adoption and institutional trading volume, as detailed in a Forbes article.

The political backlash, however, has intensified as crypto lobbying in Washington reaches record levels. Coinbase and other firms contributed over $45 million to Fairshake in 2024, funding campaigns for pro-crypto candidates (as noted in Yahoo's reporting). Murphy's office has joined Senate Democrats in demanding transparency around the ballroom project's funding, which includes donations from Apple, Amazon, and Microsoft (also reported by Yahoo). Meanwhile, Coinbase defended its political engagement as essential to shaping "economic innovation," citing the launch of nearly 100 new stablecoin projects since the GENIUS Act's passage, as FinanceFeeds covered.

The clash reflects broader tensions in the crypto sector, where regulatory uncertainty and partisan divides over campaign finance have fueled scrutiny of industry influence. As the 2026 elections approach, lawmakers are weighing whether to tighten oversight of corporate donations, while crypto firms argue for balanced policies to maintain U.S. competitiveness in digital assets (discussed in the FinanceFeeds piece).