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Coinbase is facing allegations of violating campaign finance laws with a substantial $25 million donation to the Fairshake super PAC. The U.S. public cryptocurrency exchange is under scrutiny for a potential breach of these laws.
The donation, made on May 30, has been flagged by crypto critic Molly White. She alleges that the timing of this contribution coincides with Coinbase’s bid for a federal government contract.
White contends that the donation to Fairshake might violate federal laws prohibiting contributions from entities engaged in federal contract negotiations. She notes that the U.S. Marshals Service had issued a request for proposals on March 4 for a contract to manage and dispose of crypto holdings, with Coinbase being awarded the $32.5 million contract on July 1.
This $25 million contribution […] appears to be in violation of federal campaign finance laws that prohibit contributions from current or prospective federal government contractors. This would be by far the largest known illegal campaign contribution by a federal contractor.
In response, Coinbase’s chief legal officer Paul Grewal dismissed the allegations as “misinformation” in an X post on Aug. 2. He emphasized that Coinbase “is not a federal contractor under the plain language of 11 CFR [Code of Federal Regulations] 115.1” and asserted that the company complies with all applicable laws, including those related to campaign finance.
Grewal stated:
Whether intentional or not, this is misinformation. Coinbase is not a federal contractor under the plain language of 11 CFR 115.1. USMS isn’t paying us with appropriated funds—something it made clear in the public RFP.
The controversy highlights the growing tensions between the cryptocurrency industry and regulatory bodies. The sector seeks greater political influence and clarity on regulatory issues ahead of the November elections.
Fairshake has emerged as one of the most funded super PACs of the 2024 election cycle, raising over $200 million. Significant contributions have come from prominent donors like Andreessen Horowitz and Ripple, with Coinbase leading at $45.5 million.
For more updates and news on the cryptocurrency sector, stay tuned to Global Crypto News.
