New Complaint to FEC Alleges Coinbase Violated Campaign Finance Laws

August 5, 2024

New Complaint to FEC Alleges Coinbase Violated Campaign Finance Laws

The cryptocurrency corporation donated $25 million to the Fairshake Super PAC while in active government contract negotiations

Washington, D.C. - Public Citizen and Molly White submitted a formal complaintto the Federal Elections Commission (FEC) late last week alleging that cryptocurrency company Coinbase violated campaign finance laws.

Records show that, while in active negotiations over government contracts, Coinbase made a $25 million donation to the crypto super PAC Fairshake, in apparent violation of laws prohibiting contributions from current or prospective federal government contractors. Coinbase also made a $500,000 contribution to Congressional Leadership Fund, a hybrid PAC dedicated to electing Republicans to the House of Representatives, during the time it was prohibited from contributing.

"While the cryptocurrency industry's massive spending to influence upcoming elections may, unfortunately, be legal following the Citizens Uniteddecision, Coinbase's $25.5 million in campaign contributions made while negotiating contracts with the Department of Justice are not, said Molly White, an independent researcher and author of Citation Needed."The industry is spending shocking amounts of money to attempt to buy legitimacy with members of Congress and other politicians, hoping to see legislation that will benefit the companies at the expense of everyone else. Their actions, however, should provide a stark warning to those tempted to grant them such legitimacy: the industry, as always, chooses to act as though well established laws do not apply when it suits them."

The complaint was based on new researchfrom Citation Needed researcher Molly White and from Public Citizen. In May, Public Citizen published a report on crypto super PAC spendingin the current election cycle, which at the time totaled over $100M.

"Among all big businesses that have aggressively exploited Citizens Unitedsince 2010, Coinbase's conduct stands out as especially shocking and egregious," said Rick Claypool, a Public Citizen research director. "The crypto corporation's eye-popping contributions - made in apparent violation of longstanding pay-to-play prohibitions - demonstrate how lax enforcement emboldens corporate lawbreaking. The FEC must step up."

In a Twitter/X thread posted after the complaint was filed, Coinbase Chief Legal Officer Paul Grewal argued that Coinbase is not a federal contractor and so has not violated campaign finance law. In response, Public Citizen and White submitted a supplementto their initial complaint on Monday addressing the argument and explaining why Coinbase's actions violate the law.

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