FEC Accused of Sleeping at the Wheel as Crypto Giant Pumps Tens of Millions Into 2024 Race

The progressive watchdog group Public Citizen accused the U.S. Federal Election Commission of abdicating its responsibility by failing to act in the face of "illegal" election spending by the cryptocurrency exchange giant Coinbase, a federal contractor.

Public Citizen noted in a statement Thursday that "federal law bars campaign contributions to political parties, committees, or candidates from federal contractors."

The group's statement came a day after Brian Armstrong, the CEO of Coinbase, pledged that his company would pump another $25 million into Fairshake PAC, a super PAC dedicated to electing candidates supportive of the crypto industry, which has spent big to influence the outcome of the 2024 elections. Fairshake has spent roughly the same amount of money supporting Democratic and Republican candidates, reflecting the extent to which both parties have sought to court the still-nascent crypto industry.

According to Public Citizen, Armstrong's pledge brought Coinbase's total 2024 election spending above $76 million. In August, Public Citizen filed a complaint with the FEC arguing that a portion of Coinbase's spending appears to be unlawful due to the company's multimillion-dollar contract with the U.S. Marshals Service.

"Coinbase has spent more than $50 million in what appears to be illegal campaign contributions from a federal contractor to attack candidates who might stand up to Big Crypto; meanwhile, the FEC is snoozing through the election," Rick Claypool, Public Citizen's research director, said Thursday.

"The time to hold campaign finance violators accountable is now—not after illegal election spending has corrupted our democracy," Claypool added.

The FEC is currently chaired by Sean Cooksey, a Republican appointed by former president and GOP nominee Donald Trump. Evenly divided between three Democrats and three Republicans, the agency has faced backlash for refusing to take action to stem the proliferation of AI-generated deepfakes and illegal campaign spending.

What's more, as The New York Timesreported earlier this year, the agency has moved aggressively in recent months to weaken already-inadequate constraints on political spending.

"One decision this spring that is already reshaping the 2024 presidential race allowed super PACs and campaigns for the first time to work together to plan and execute costly door-to-door canvassing operations," the Times noted.

Additionally, the commission "decided that a wealthy donor could put money into a trust that then could distribute donations to campaigns—while keeping the original source anonymous," the Times reported.

This year's federal election cycle is on pace to be the most expensive in U.S. history, according to OpenSecrets. An analysis released earlier this week by Americans for Tax Fairness found that billionaire families have pumped nearly $2 billion into federal elections so far—likely a significant underestimate, given that the sum excludes untraceable dark money.