Public Citizen, a consumer advocacy group, and Molly White, a writer who has been critical of cryptocurrencies, have filed a complaint with the Federal Election Commission, claiming Coinbase violated campaign finance laws.
According to the complaint, Coinbase donated $25 million to the pro-cryptocurrency group Fairshake Super PAC and negotiated with the U.S. Department of Justice for government contracts, thereby violating campaign finance laws. The U.S. Marshals Service, a division of the Justice Department, said announce This summer, it announced it had signed a $32.5 million contract with Coinbase Prime to provide custody services.
Cryptocurrencies have quickly become a part of the electoral landscape, and millions of dollars continue to flow into super political action committees, including Fairshake. Most of Fairshake’s recent earnings appear to have come from Coinbase, which announced a $25 million donation on June 3. Other companies, such as a16z crypto and Ripple, have also donated millions of dollars.
“Of all the major companies that have aggressively used this, Citizens’ Coalition “Coinbase’s actions since 2010 stand out as particularly shocking and heinous,” said Rick Claypool, Public Citizen’s director of research. name. “The dazzling contributions of crypto companies appear to be clear violations of the longstanding pay-to-play ban, and show how lax enforcement encourages corporate violations. The FEC should step in.”
The U.S. Supreme Court ruled in 2010 in Citizens United v. Federal Election Commission that corporations and other outside entities can spend unlimited amounts of money on elections.
their complain In their lawsuit filed on August 1, White and Claypool argued that Coinbase is a federal contractor because it “currently holds a government contract with the United States Marshals Service (USMS), a federal agency within the U.S. Department of Justice.” According to the lawsuit, federal election campaign law prohibits “federal contractors from making direct or indirect contributions to political committees, political parties, or candidates.”
Coinbase Chief Legal Officer Paul Grewal Responded last week After the complaint was filed, X said the exchange was not a federal contractor.
“Whether intentional or not, this is misinformation. Coinbase is not a federal contractor as per the clear language of 11 CFR 115.1. The USMS (United States Marshals Service) does not pay us with allocated funds. This was made clear in the public RFP (request for proposal),” Grewal said.
all supplement White and Claypool’s complaint was filed on August 5, alleging that Grewal’s claims were inaccurate.
“Because the Asset Forfeiture Fund is a congressional appropriation, Coinbase was paid for the contract with funds appropriated by Congress and is therefore a federal contractor,” they said in a supplemental filing.
Grewal criticized the complaint. Post to X Later Monday, he said the seized cryptocurrency was not “congressional funds.”
“It’s also worth noting that Coinbase donated equally to both Democratic and Republican super PACs, donating $500,000 each to each party’s House and Senate campaign funds in 2024,” Grewal added. “White and Public Citizen seem to want to report political bias where none exists. Quite simply, the worldview these researchers espouse in this paper is not law, as much as they wish it to be.”
update: August 5, 9:57 PM UTC, with comments from Paul Grewal
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