Cash News
You have to look and listen closely, but a subtle disclaimer at the end of a recent campaign ad in support of Republican U.S. Senate candidate John Deaton can tell you a lot about a well-funded group playing a big role this campaign season.
The ad was paid for by a super PAC known as The Commonwealth Unity Fund, with support from the cryptocurrency industry. And it’s pouring big money into Deaton’s long-shot effort to defeat U.S. Sen. Elizabeth Warren, D-Mass.
The PAC, founded by crypto-friendly attorney James Murphy, has so far spent more than $1 million on the Swansea lawyer’s behalf, according to an analysis by the website Open Secrets.
The PAC dropped $450,000 on a direct mail blitz to voters statewide, and $500,000 on a media buy earlier this month, according to CoinTelegraph, a trade publication, citing reports filed with the Federal Election Commission.
That spending came on top of the $300,000 the PAC spent in July, the trade publication reported.
The goal of all that spending is a pretty straightforward one: To replace Warren, a vocal critic of the industry, with a friendlier voice on Capitol Hill.
And Warren has not been shy about those criticisms.
“Crypto has become the payment method of choice for rogue nations, drug lords, ransomware gangs, and fraudsters to launder billions of dollars in stolen funds, evade sanctions, fund illegal weapons programs, and profit off of devastating cyberattacks,” Warren said in a 2023 statement on her Senate website.
Warren piled on during a U.S. Senate hearing in July, where she called for stricter anti-money laundering protections aimed at keeping the industry from “undermining U.S. national security.”
“Cryptomining is a disaster for the environment, and it can pose national security risks as well,” Warren, who’s sponsoring an anti-money laundering bill, told the Senate Banking Committee on July 25.
The industry has pushed back, writing in a February letter to Congress that Warren’s legislation, aimed at foreign threats, “risks our nation’s strategic advantage, threatens tens of thousands of U.S. jobs, and bears little effect on the illicit actors it targets.”
“To be clear, the digital asset industry strongly supports U.S. efforts to address illicit activities within the blockchain space,” the letter, signed by industry leaders, pols, and policymakers, reads. “To achieve this effectively, it’s crucial for the industry to develop within the United States, governed by domestic laws and regulations.”
Both Deaton and Quincy City Council President Ian Cain, who also is seeking the GOP’s nomination in September, have ties to the industry.
Robert Antonellis, a conservative activist, also is running.
Deaton defended tech firm Ripple Inc. in a high-profile court fight with the U.S. Securities & Exchange Commission.
In his memoir, “Food Stamp Warrior,” Deaton explained his support for, and interest in, cryptocurrency, saying the industry’s story is “one much like my own: it is a story of survival and evolution, not just for the few but for the many.
“The more I learned about it, the more I realized that our entire financial world sat on a precipice. This was something important,” he wrote. “A whole new world was about to be born, and the powers that be did not want us to know about it.”
The industry has recognized him for that support.
Campaign finance records showed Deaton had $974,769 on hand through the end of June. And his backers included some of the industry’s biggest names.
Anthony Scaramucci, a former Trump White House aide-turned podcast host, and founder of the investment firm SkyBridge Capital, donated $6,600 to Deaton in March, Federal Election Commission records showed.
Other high-profile donors included financiers Cameron and Tyler Winklevoss; investor Trent Herren; real estate magnate Jeff Wilhelms, and Chris Larsen, the executive chairman of the tech firm Ripple Inc., FEC filings showed.
Ripple also kicked in $1 million to the Commonwealth Unity Fund, as did Winklevoss Capital Management, records show.
On his campaign website, Cain described himself as the founder of a “technology startup incubator.”
The company, Quincy-based QUBIC Labs, says its mission is to “[bring] together people, business, government, and academia to fuel a global hub for blockchain technology, development, and innovation.”
While it can be used for other purposes, blockchain technology is most often employed as a record-keeping system for cryptocurrency transactions.
Speaking to Politico in April, Cain said he wouldn’t be a single-issue candidate, arguing that “crypto will not be the No. 1 issue on the minds of Massachusetts voters.”
“And I think if they’re both [Deaton and Warren] leading on both ends of this, then they’re not the right people [for the job],” he told the online news organization.
In addition to Massachusetts, the industry also is active in other key Senate races nationwide.
Defend American Industry, one of three affiliated super PACs funded by the crypto industry, announced last week that it will spend at least $12 million on behalf of GOP U.S. Senate hopeful Bernie Moreno.
Moreno is looking to unseat Democratic U.S. Sen. Sherrod Brown in a closely watched contest in Ohio that could determine the balance of power in the upper chamber.
All told, the industry is set to spend more than $80 million this cycle to elect friendly candidates and protect its interests, Politico reported.
National Republicans, meanwhile, also are recognizing the industry.
The party’s official platform, adopted at last month’s Republican National Convention in Milwaukee, declares that the GOP will “defend the right to mine bitcoin, and ensure every American has the right to self-custody of their digital assets.”
Republicans also vowed to “end [the] Democrats’ unlawful and unAmerican (sic) Crypto crackdown and oppose the creation of a Central Bank Digital Currency.”
Former President Donald Trump also has embraced the industry.
Financial disclosures made public last week showed that the Republican presidential nominee earned $7.2 million in an NFT licensing deal, and owns crypto valued at between $1 million and $5 million.
For the industry, winning a favorable regulatory and legislative environment is an “existential” question, Lee Reiners, an economics professor and crypto skeptic, at Duke University, told MassLive.
That’s because a stronger regulatory environment could spell financial doom for some companies, Reiners argued.
Meanwhile, failing to regulate the industry strongly enough could “sow the seeds for the next financial crisis,” Reiners said.
“The fact that they are spending so much money and putting so much money into lobbying, and getting favorable legislation passed, is reflective of the broader problem that cryptocurrency is not actually useful yet,” Reiners said.
And at least for right now, with most voters unplugged from the issue, there’s almost no downside for politicians who support the industry.
And even with Warren’s resistance, their ranks are now starting to include some Democrats.
“The industry views this as a fight for its survival,” Reiners said.