With two of his fiercest competitors in jail or likely to go there soon, Brian Armstrong has become arguably the most influential leader in the digital asset industry. His ascension comes at an intriguing time: the start of the U.S. election season, which his company has called “the most significant in cryptocurrency history.”
The Coinbase Global Inc. chief executive’s growing influence is bolstered by his own resurgent wealth. Armstrong has put some of his fortune to work to help fund what he calls a “war chest” to support cryptocurrency policymakers as the industry remains under pressure from a U.S. government crackdown that began last year. According to Josh Vlasto, a spokesman for the political action committee, he personally donated $1 million to the Fairshake super-PAC, and Coinbase itself contributed another $24.5 million.
Armstrong and his company account for about a third of the $85 million the group says it has raised so far. Coinbase described the PAC’s goal as big spending to bolster “super-powered grassroots support for cryptocurrencies,” recalling that the industry’s influence on politics persists even after the fall of mega-donor Sam Bankman-Fried.
Armstrong still has plenty of room to spend if he wants to. Last year’s surge in company stock brought his personal fortune to about $5.8 billion, a 300 percent increase from where it was at the start of 2023, according to the Bloomberg Billionaires Index. Last year, he cashed in $78 million worth of company stock, according to InsiderInsights.com.
Coinbase itself is in a legal battle with the Securities and Exchange Commission, which last year accused the company of operating an unregistered exchange, broker-dealer and clearinghouse for tokens it deemed to be securities. Coinbase disputes those charges, arguing that the SEC is overstepping its authority.
Fairshake supports pro-cryptocurrency candidates from both the Democratic and Republican parties. The most money has been spent on Rep. Patrick McHenry, a North Carolina Republican who announced he will not seek re-election. According to OpenSecrets, Fairshake also supported Representatives Dusty Johnson, a Republican from South Dakota, Josh Gottheimer, a Democrat from New Jersey, and Tom Emmer, a Republican from Minnesota.
More details about the superPAC’s donors are expected to be revealed Wednesday through filings with the Federal Election Commission. According to Vlasto, Fairshake has also received $20 million from venture capital firm Andreessen Horowitz, which is very active in raising funds for cryptocurrency companies. Other donors include Ripple, which gave $20 million, and venture capital firm Electric Capital, which donated $500,000, he added.
For industry critics, Coinbase’s lobbying is a reminder that the industry’s influence on Washington persists, even after the collapse of the FTX exchange. Incarcerated former FTX leader Bunkman-Fried shook Capitol Hill with his huge political spending, and his subsequent downfall and conviction on fraud charges left deep scars on the industry. One of Armstrong’s chief rivals, Binance’s Changpeng “CZ” Zhao, is out on bail and awaiting sentencing to 18 months in prison after pleading guilty to failing to provide an effective anti-money laundering program at his cryptocurrency exchange.