Coinbase Faces $25M Super PAC Donation Allegations

Coinbase, the prominent U.S. cryptocurrency exchange, is under scrutiny for potentially breaching campaign finance laws with a $25 million donation to the Fairshake super PAC. The company, however, dismisses these claims as “misinformation.”

The donation, made on May 30, has drawn attention from crypto critic Molly White, the founder of the “Web3 is Going Just Great” website. White alleges that the timing of the contribution coincides with Coinbase’s bid for a federal government contract, raising legal concerns.

White suggests the donation to Fairshake might violate federal laws that prohibit contributions from entities engaged in federal contract negotiations. She points out that the U.S. Marshals Service issued a request for proposals on March 4 for a contract to manage and dispose of crypto holdings, which Coinbase was awarded on July 1 for $32.5 million.

“This $25 million contribution […] appears to be in violation of federal campaign finance laws that prohibit contributions from current or prospective federal government contractors. This would be by far the largest known illegal campaign contribution by a federal contractor,” White stated.

In response, Coinbase’s chief legal officer Paul Grewal refuted the allegations as “misinformation” in a post on X on August 2. He emphasized that Coinbase “is not a federal contractor under the plain language of 11 CFR 115.1” and asserted that the company complies with all applicable laws, including those related to campaign finance.

This controversy highlights the growing tensions between the cryptocurrency industry and regulatory bodies as the sector seeks greater political influence and regulatory clarity ahead of the November elections.

Fairshake has emerged as one of the most well-funded super PACs of the 2024 election cycle, raising over $200 million. Significant contributions have come from prominent donors like Andreessen Horowitz and Ripple, with Coinbase leading at $45.5 million, according to campaign finance researcher OpenSecrets.

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