Cryptocurrency companies have spent more than $ 134 million for the 2024 US elections, fueling concerns about their growing political influence and their potential risks for regulatory stability, according to a report by the Center for Political Accountability (CPA).
The growing link of cryptographic companies with American policy raises new concerns for regulators, investors and the broader financial system, according to a report published by the Center for Political Accountability (CPA).
Cryptocurrency companies have paid $ 134 million cumulative dollars in the US elections of 2024 in “unoccounted political expenses”, which presents certain critical challenges, said the March 7 report.
“While companies that provide these contributions can seek a favorable regulatory environment, these political gifts are more public confidence and expose companies to legal, reputation and commercial risks that cannot be ignored,” added the report.
The regulation of cryptocurrencies took the scene in the stage last week following a historic decree of the American president Donald Trump to create a Bitcoin Strategic Reserve (BTC) before the first summit of the cryptography of the White House on March 7.
Source: Politicalaccoutability.net
Fairshake, a political action committee (CAP) supported by large cryptography companies, including Coinbase, Ripple and Andreessen Horowitz, was one of the largest contributors, spending more than $ 40 million to support candidates aligned on pro-Crypto policies.
FAIRSHAKE and the affiliates were active in the main breeds of the congress, trying to shape the law favorable to digital assets.
“While industry continues to request an influence by large contributions and opaque financial maneuvers, the risks of instability, regulatory reaction and distrust of the public only grow,” said the report.
Donations of Fairshake. Source: Politicalaccoutability.net
The influx of money from cryptography to politics has not gone unnoticed by regulators. In August 2024, the Consumer Advocacy Group Public Citizen filed a complaint with the Federal Election Commission (FEC), alleging that the contributions of Coinbase companies in Fairshake and the Congressal Leadership Fund constituted a violation of the electoral federal law because of their status as a federal entrepreneur.
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Coinbase hired an additional $ 25 million in Fairshake for the mid-term electoral cycle of 2026.
Coinbase hires $ 25 million in Fairshake. Source: Coinbase
“The stakes are too high so that we can stand on the sidelines, and that is why we, at Coinbase, are proud to help our share,” wrote the company in a blog article in October 2024.
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Crypto’s political gifts may be necessary for regulatory clarity
Despite the risks highlighted by the report, some regulatory experts see the donations necessary to advance regulations more suited to innovation.
“As a person deeply involved in the crypto, I see these expenses as necessary for regulatory, crucial clarity for stability and growth,” according to Anndy Lian, author and expert in intergovernmental blockchain:
“It seems likely to strengthen investors’ confidence by reducing uncertainty, as shown by the Pro-Crypto candidate wins by increasing the feeling of the market, such as the high post-electoral of Bitcoin.”
However, risks, including “regulatory capture”, where the interests of large companies have priority, may present challenges and erode the confidence of cryptographic investors. However, this is part of the organic growth of the emerging cryptographic industry, said Lian, adding:
“The transparency and decentralization of the cryptographic community could mitigate this, guaranteeing fair regulations. Although controversial, I do not find it problematic, considering it as the maturation of the industry, although the public counterpoup to destabilize the policy if it is considered a favor. »»
The debate on the role of crypto in politics follows the high level collapse of the balance token (balance), a same approved by Argentinian president Javier Milei. The initiates of the project would have siphoneed more than $ 107 million in liquidity in a carpet traction, triggering a price collapse of 94% in a few hours and annihilating $ 4 billion.
More than 100 complaints of government fraud have been opened in Argentina since the Balance Mencoin scandal, illustrating the risks of the executive power of a country promoting “all kinds of unregulated security”, indicates the CPA report.
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