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FTX-Backed PACs Expand the Crypto Lobby in Congress

as a recent change In the cryptocurrency market, major players in the industry have been forced into bankruptcy, and FTX owner Sam Bankman-Fried has emerged as something of a savior. His cryptocurrency exchange buys smaller companies and turns billionaires into major players in a market undergoing massive change, drawing attention from Washington, DC.

Despite market problems, cryptocurrencies appear to be here to stay — and legislators will soon have to choose between regulating the industry or letting them buy their votes With leading cryptocurrency PAC backing both parties, a series of state and federal legislators are worth noting their relationship with cryptocurrencies.

In recent months, Bankman-Fried has risen to prominence as a major financier of liberalism, both as a public figure and as a promoter of Democratic politics. The crypto mogul has poured hundreds of thousands of dollars into the coffers of the Democratic National Committee, became the largest single contributor in May, and has invested in cryptocurrencies like New York Congressman Kirsten Gillibrand. Donated thousands of dollars to supporting Democrats. In addition to his personal donations, he and his brother He have funneled millions of dollars into candidates through his PACs of Protect Our Future and Guarding Against Pandemics.

But while Bankman-Fried elaborates on his role as a Democratic supporter and influencer, FTX’s other movers and shakers are looking to rise to fame by reaching out across the aisle. . Earlier this year, FTX executive Ryan Salame launched his own PAC, his American Dream Federal Action. Funded entirely by his four donations from Salaam ($12 million), American His Dream focuses solely on Republican elections. His girlfriend, Michelle Bond, is running for New York’s First Congressional District to replace Lee Zeldin, a Republican running for governor. Salame’s donated to his GMI PAC, another super PAC. GMI PAC put over $1 million into his Crypto Innovation PAC. GMI PAC spent at least his $115,000 on Bond racing.

FTX management-backed PAC has some early wins. Protect Our Future helped Democrats win the U.S. House primary, including Illinois’s Jonathan Jackson, Nikki Budzinski, and incumbent Rep. Chui Garcia. Alex Boles of the New York State Legislature, who won a fundraiser co-hosted by Gabe Bankman-Fried, won the primary. The American Dream can count on Senate Republican candidate Katie Britt from Alabama. Congressman Ted Budd, Republican candidate for the Senate of North Carolina. Brad Finstad, Republican candidate for Minnesota’s 1st congressional district. Bo Hines, Republican candidate for the 13th Congressional District of North Carolina. Rep. Dusty Johnson of South Dakota and Sen. John Boozman of Arkansas are among its success stories.

Not all efforts were successful. Protect Our Future plowed $11 million into supporting Oregon Democrat Carrick Flynn, who lost the primary last May. Rep. Rodney Davis (Republican, Illinois), despite $2.4 million in spending behind his candidacy from the American Dream, is the Republican of Illinois and Trump-backed Rep. Mary Miller. (Rep.) and lost after the two had a confrontation for redistricting.

“It’s a very wealthy industry and we were very happy that it wasn’t regulated,” Public Citizen’s Craig Holman told Roll Call last month. “But as the federal government began to pay more attention to regulating the industry, it suddenly became a big political player in the Capitol, much like we’ve seen in the big tech industry.”

FTX CEO Sam Bankman-Fried testifies during a hearing before the House Financial Services Committee on December 8, 2021 in Washington, DC.

Photo: Alex Wong/Getty Images

there is an existing Laws Governing Cryptos — And A Pending Opportunity To Change Them.

Last month, Sam Bankman-Fried told the Washington Post he was “very excited” that a new law called the Responsible Financial Innovation Act was already on the agenda. The bill, sponsored by Gillibrand, puts the Commodity Futures Trading Commission in charge of regulating cryptocurrencies. The CFTC currently regulates bitcoin and ethereum futures, but the new bill would give the agency full control over the cryptocurrency market, excluding the Securities and Exchange Commission.

“I think the CFTC makes a lot of sense as a market regulator,” Bankman-Fried told the newspaper. As the young industry struggles, it relies on methods tested by its predecessors. “They are really experienced, competent, efficient and have deep knowledge of the market and the crypto market. You can do it really well.”

“They don’t want regulation or they want to help create regulation. Anything else new?”

According to Jeff Hauser, founder and director of the Revolving Door Project, “Much of activity in the crypto space involves buying and selling securities, which in the United States has been regulated by the SEC for nearly 90 years.”

As The American Prospect reported in June, FTX sought to control the regulatory reach around cryptocurrency recall tactics deployed by investment group Blackstone in the late 2000s. After years of mostly donating to the Republican Party, financial firms took a more ‘two-sided’ approach as Hamilton James executives became Barack Obama’s primary funders as the financial crisis began. and secured the foundation of the company. Picked up after the 2008 presidential election. Bankman-Fried personally donated to many Democrats on the Senate Agriculture Committee — Dick Durbin of Illinois and Michael Bennett of Colorado, Chairman Debbie Stabenow of Michigan and Tina Smith of Minnesota. and New’s Cory Booker. Jersey – He also donated to Republican ranking member Boozman.

Senator Sherrod Brown (D-Ohio), a member of the committee, told the Associated Press in May: “Anything else new?”

Andrew Meyerson A researcher on the OpenSecrets committee told me that the uniqueness of the cryptocurrency market means that cryptocurrency political contributions are made by far fewer groups of actors than in other financial industries. In the banking industry, “hundreds of CEOs and political action committees are seen as contributing,” but cryptocurrency contributors are a narrow group, more narrow-minded about the politics of the billion-dollar markets. It can lead to thinking.

“An unusually small number of people are responsible for most of the industry’s contributions,” he said.

Giving beyond ideology bridges the gap between Bankman-Fried and Salame. Salame’s American Dream Federal Action PAC supports a wide range of Republicans, most of whom are endorsed by former President Donald Trump. The American Dream candidate is strikingly different from Bankman-Fried’s more moderate and liberal Democratic Party goals, and even more extreme. There are two notable exceptions to his. Johnson voted to impeach Trump. Boozman, whose American Dream has donated more than $1.2 million to date, told voters on Jan. 5, 2021, that he supports the results of the Electoral College. I am watching.

In a statement to The Intercept, Salaam said his PAC is focused on promoting free markets, liberty and conservatism, ideologies he has long believed in.

“As a lifelong conservative, we will elect a forward-looking Republican leader who understands the urgent need to protect America’s long-term prosperous, secure, and free enterprise system from new threats and challenges,” Salaam said. That’s why I founded the American Dream Federal Action.”

United States - May 20 (File): Rep. Richie Torres (DN.Y.) is seen on the steps of the House of Representatives in the Capitol during final voting for the week of Thursday, May 20, 2021.  (Photo by Tom Williams/CQ - Roll Call, Inc via Getty Images)

Rep. Richie Torres (DN.Y.) stands on the House steps of the Capitol during the final vote of the week on May 20, 2021 in Washington, DC.

Photo: CQ-Roll Call, Inc via Getty Images

among the beneficiaries Bankman-Fried’s funds are represented by Rep. Ritchie Torres (DN.Y.), who received the cryptocurrency at an April fundraiser held by executives of venture capital firm Andreessen Horowitz. In June, Bankman-Fried hosted a fundraiser for Torres, along with pollsters Sean McElwee and David Shor.

Bankman-Fried spokesperson Mike Levine said Torres was targeted by the group. It enables rapid testing of personal protective equipment and facilitates the development of therapeutics such as antivirals and monoclonal antibodies. What wasn’t mentioned was Torres’ outspoken cryptocurrency endorsement both on social media and on the New York Daily News page.

“Our strategy this primary season has been to support our champions in pandemic prevention,” Levine wrote in an email to The Intercept. He said the PAC “is asking politicians who are not advocates for pandemic prevention that doing the right thing with pandemic prevention funding and security policy will help build a coalition of political alliances to support future campaigns.” I want to show you,” he said.

“You try to develop some supporters who are likely to land in Congress and who may view the proposed rule favorably when the time comes. …that seems to be what he’s doing. .

Most of his money goes to Democrats and Democratic-affiliated groups, but Bankman-Fried was given to Republican Senators Susan Collins of Maine and Lisa Markowski of Alaska.

Faiz Shakir, a senior adviser to Senator Bernie Sanders, said, “How many allies are likely to land in Congress and who, when the time comes, will look favorably on the proposed rule and likely build relationships?” I’m trying to grow,” he said. “That seems to be what he does.”

Revolving Door’s Hauser is highly skeptical and even hostile to what he sees Bankman-Fried trying to control the fate of the Democratic Party. Bankman, who faces a political climate in which big business doesn’t enjoy the same popular support he had in the early 21st century decades are allowing more populist politicians to be locked up. left. In Hauser’s view, it means finding who is flexible.

“They need to dig deeper into the Democratic Party’s ostensible left to undermine financial regulation arbitrage because the financial regulation movement is stronger within the Democratic Party than it was 15-25 years ago. because,” he told me.

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