Crypto Firms Spend Big on Politics as Stocks Surge Amid Legal Battles

U.S. crypto firms have been actively pushing for deregulation and making significant political contributions, which has raised concerns among regulators and the public. The Center for Political Accountability (CPA) published a report highlighting the "profound risks" associated with the crypto industry's aggressive lobbying efforts and opaque political spending. The report suggests that these actions have eroded investor confidence and public trust in the long-term viability of these companies.

The crypto industry's political spending reached unprecedented levels during the 2024 presidential election, with firms like Coinbase and Ripple leading the way. Coinbase's political action committee (PAC) donated over $79 million to support the reelection of President Donald Trump, while Ripple contributed over $63.6 million. Additionally, Coinbase donated $1 million to Trump's inauguration committee, and Ripple donated $5 million in digital assets. Coinbase has also pledged $25 million for the 2026 mid-term elections. The Winklevoss twins, founders of the crypto exchange Gemini, donated $1 million worth of Bitcoin to Trump's campaign, exceeding the legal limit and receiving refunds of over $300,000.

These contributions come at a time when the crypto industry is facing significant regulatory scrutiny. Coinbase, Ripple, and Gemini have all been involved in legal battles with the U.S. Securities and Exchange Commission (SEC) for operating as unregistered securities exchanges. In June 2023, the SEC charged Coinbase for this violation. Ripple has been in a legal battle with the SEC since 2020, with a partial victory in court in August 2024 when a judge ruled that XRP could not be classified as securities. The SEC has appealed this decision. Gemini and Genesis were also charged by the SEC in January 2023 for offering unregistered securities through their Earn program. Genesis settled the case by paying $21 million, while Gemini continued to fight the charges.

Despite these legal challenges, the crypto industry has seen some positive developments. In February 2024, the SEC dropped its investigation into Gemini, and the company has reportedly filed for an initial public offering (IPO). The SEC also dismissed its case against Coinbase on Feb. 27. Additionally, President Trump signed an executive order creating a Strategic Bitcoin Reserve, which could further boost the industry's prospects.

The CPA