Washington (AP) — Erin Huchin prepared for the worst when a mysterious, well-funded group began buying TV ads last month in a highly competitive South Indiana parliamentary race.
Houchin assumed he would face a negative blitz that crushed her when he ran for the same seat in 2016. But in reality, the opposite happened.
The American Dream Federal Action, a super PAC funded by the CEO of cryptocurrencies, has saturated the district with ads promoting Hoochin as a “stop Washington socialist” and “trumptafu” conservative. That push helped ensure her victory in the Republican primary last week.
“All you can do is hold your breath,” said Houchin’s longtime consultant Cam Savage when they learned about buying ads. “It may help you, but the fear is that it will end you.” He said Houchin wasn’t asking for support, except to fill out a candidate survey from the crypto group with the industry. Added that it had nothing to do with it.
The impact of unsolicited help shows how crypto tycoons are emerging as a new power player in American politics. Millions of dollars in primaries as they seek to influence parliamentarians, Republicans, Democrats, and other government officials who are drafting regulations to govern the industry. Is pouring.
For the first time this year, industry executives have invested $ 20 million in federal racing, according to records and interviews.
It is a delicate but deliberate march by a company that makes money by its nature, partly based on avoiding government attention.
In addition to campaign spending, crypto companies and those who are in a position to lose if the industry becomes mainstream since 2018 have spent more than $ 100 million on lobbying on this issue, records show. increase.
Following a worn-out path, they retained former high-ranking officials such as Max Baucus, a former Democratic Senator in Montana, who chaired the Finance Commission.
Not only will the Biden administration and parliament consider new regulations, but they will also set the level of funding for the institutions that oversee them, creating impetus.
Treasury Secretary Janet Yellen said this week that financial regulators will soon release a report on the risks of cryptocurrencies and other digital assets.
“Sure, there are a lot of risks associated with cryptocurrencies,” she said during a hearing on financial stability on Tuesday.
Authorities are considering what consumer protection and financial reporting requirements to implement and how to use the anonymity provided by cryptocurrencies to crack down on tax evasion, money laundering and fraudulent criminals. ..
“What do they want? They don’t want regulation or want to help write it. What else is new?” Industry critic D-Ohio Sherrod Senator Brown asked.
Cryptocurrencies are digital assets that can be traded on the Internet without relying on the global banking system. They have been advertised as a way for people who have limited means of building wealth by investing in the next big thing. However, they are very speculative and often lack transparency, which greatly increases the risk.
Jan Santiago, deputy director of Global Anti-Scam, an organization that helps victims of cryptocurrency fraud, said the industry is reluctant to crack down on malicious individuals.
“I don’t think they have any financial incentives unless it affects their bottom line and reputation,” he said.
There are signs that cryptography is becoming mainstream. Fidelity Investments, one of the country’s largest retirement account providers, announced earlier this month that it will begin allowing investors to deposit Bitcoin into their 401 (k) accounts.
At the same time, government oversight is increasing.
Last week, the Securities and Exchange Commission announced plans to nearly double the size of its staff focused on cryptocurrency monitoring. A few days later, the Justice Department indicted the CEO of the cryptocurrency platform, claiming to have organized a “$ 62 million global investment fraud plan,” one of the numerous civil and criminal cryptocurrency cases filed by federal authorities. .. Prosecutors say he promised generous profits, but instead abandoned investor money.
Meanwhile, parliamentarians and the administration have expressed concern that Russia’s oligarchs could turn to cryptocurrencies to circumvent US sanctions that came into force when Russia invaded Ukraine. bottom.
However, at least one member is actively involved in promoting the attractiveness of cryptocurrency wealth.
Republican Rep. Madison Corthorn has touted a new crypto coin called “Let’s Go Brandon.” This is a modest shorthand of vulgar insults to Joe Biden. In a video posted on Twitter, Cawthorn appeared with the founder of cryptocurrencies, emphasizing “This is going to the moon, baby” and giving viewers access to Coin’s website to “ride the train”. I urge you.
After the first surge, it plummeted in value and is now worth only a small portion of the penny, as first reported by the Washington Examiner.
Parliamentary crypto proponents have acknowledged the problem, but claim that the $ 2 trillion industry has matured.
“I’m confident that Bitcoin will protect consumers,” said Senator Cynthia Lummis (R-Wyo), who invested between $ 150,002 and $ 350,000 in currencies, according to financial information. “I’m not sure that all cryptocurrencies protect consumers. In fact, I’m betting that most of them are fraudulent.”
Others believe that concerns about cryptocurrency fraud are being hyped.
“It can be a simple conclusion for people to say that there are so many scams in the field,” said Ashley Eversall, a former SEC lawyer. “It’s a headline, but I’m not sure if it’s a larger percentage.”
In Washington, Democrats were far more hawkish than Republicans. “They took me to’hello’, so they don’t have to lobby me,” said Republican Lumis. “The Democratic Party is another story.”
Proponents of many cryptocurrencies have long opposed regulation. But lobbyists say it is now a resolved debate and their current purpose is to convince skeptics not to regulate too aggressively.
The founder of the Chamber of Commerce, Perian Boring, has been lobbying lawmakers and federal agencies since 2017, developing accounting standards for cryptocurrencies and other digital assets, making crypto companies listed. I’m trying to help you become.
“Many companies are hesitant to touch cryptocurrencies because of the lack of standards,” said Boring, who spent $ 1.9 million on lobbying the federal government.
Some lobbyists want the wave of campaign spending to help, many of which are aimed at Democratic primary races.
Christine Smith, Executive Director of the Blockchain Association, said: Smith has spent $ 4.2 million on his lobbying activities since 2018. “If you don’t get involved constructively, the government can actually get involved and really confuse you,” she added.
As a result, the industry is clamoring for specific candidates, which fosters a sense of resentment among some Democrats. In the suburbs of Atlanta, Democrats Carolyn Bourdeaux and Lucy McBath are fighting after the districts were merged during the constituency change.
Funded by Sam Bankman-Fried, the 30-year-old Billionaire founder of crypto exchange FTX, a super PAC called ProtectOurFuture spends at least $ 2.7 million on advertising to support McBath, making McBath a democratic policy priority. Emphasizes that it supports the matter but nothing is said about cryptocurrencies.
“They don’t do this because of their good heart. They do this because they want something, and that’s to avoid restrictions,” Bourdeaux said.
The FTX and Macbus campaigns did not respond to requests for comment. Protect Our Future, which plans to spend at least $ 10 million on medium-term campaigns, said their spending has nothing to do with cryptocurrency regulation.
In a statement, Group President Michael Sadowsky said, “There are many factors that go into our support, such as voting history, policy platforms, feasibility as a candidate, public services and professional experience.” Said.
Cryptographic Super PAC is active in other marquee races, including the primary of the Democratic Senate in Pennsylvania. Here, another crypto group linked to Bankman Fried spent $ 212,000 last week on an ad to help John Fetterman, the state’s deputy governor of the Democratic Party running for the Senate. According to the ad, Fetterman “will not be fooled by lobbyists or forced by politicians.”
But overall, spending is large enough to question industry motives.
“It tells all Democrats that if you have a primary association, they could come for $ 2 million. The House Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets. “If you have a lot of high-paying lobbyists and big PACs, you don’t need a good discussion in Washington. Some kind of discussion is needed,” said Brad Sherman, a crypto critic who chairs the. only.”
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