Cryptocurrency critic Molly White and the consumer advocacy group Public Citizen have escalated their battle against Coinbase, alleging violations of U.S. campaign finance laws. They filed an updated complaint with the Federal Election Commission (FEC) on August 5, asserting that Coinbase breached regulations by contributing to a political action committee while under a government contract.
The Controversy
The dispute centers around a $25 million donation Coinbase made to the pro-crypto Fairshake Super PAC in May. White and Public Citizen argue that this donation violated campaign finance laws, as Coinbase was negotiating a contract with the U.S. Marshals Service around the same time. They assert that since the Marshals Service contract involved Congressionally appropriated funds from the Assets Forfeiture Fund, Coinbase qualifies as a federal contractor and should be subject to specific restrictions.
Coinbase’s Defense
Coinbase’s chief legal officer, Paul Grewal, has denied these allegations. Grewal argues that the seized cryptocurrencies, including those from the defunct exchange FTX and the Silk Road platform, are not Congressionally appropriated funds, thus exempting Coinbase from the relevant campaign finance laws. He also emphasized that Coinbase’s political contributions have been bipartisan, with equal donations to Democratic and Republican super PACs for the 2024 election cycle. Grewal dismissed the allegations as an attempt to paint Coinbase as politically biased, which he claims is untrue.
Public Citizen’s Position
Public Citizen’s Research Director, Rick Claypool, has criticized Coinbase’s actions, accusing the company of exploiting the legal landscape established by the Citizens United case in 2010. Claypool claims that the company’s substantial political contributions highlight a broader issue of corporate influence in politics, urging the FEC to take decisive action against what he sees as corporate lawbreaking.
