Widespread reporting revealed the United States’ largest cryptocurrency bank, Coinbase, has formed a political action committee (PAC). This is the debate. Is onboarding broader sectors, mainstream folks, coming at too grave a cost? Is crypto’s philosophical soul worth greater adoption? One company is threading between those tensions, siding on the venial sin of being in bed with gatekeepers while moving against the mortal sin of not bringing everyone to digital assets. And now they’re bent on conquering electoral politics.
Coinbase Forms PAC
Colin Wilhelm effectively broke the story, and he did where it would get traction, Twitter. “SCOOP: @Coinbase has formed a political action committee as part of a push to increase its presence in DC,” he tweeted late last week.
Cryptocurrency success stories such as Coinbase have a real choice: wait around to be regulated, which is coming in as many forms imaginable; or, get ahead of politicians, and frame regulation in a favorable manner. The answer seems obvious.
The San Francisco-based crypto bank is officially the first in the space to form a PAC, a fact later confirmed by the Federal Election Commission (FEC). For potential institutional investors, such actions show mature, long-term thinking leads Coinbase. For the market as a whole, it just might be a lynchpin in the quest to bring about more certainty, clarity, going forward from regulators.
It’s the latest in a series of such moves for the bank. Its executives are well known political animals, personally donating to favorited politicians. As a unit, however, the company reportedly approached US Securities and Exchange Commission (SEC) regulators about becoming a full-fledged brokerage, which would better explain the whys behind its PAC. If regulators don’t play ball, the politicians who appointed them could be targeted for defeat.
To outsiders, US politics are a melange of screwy laws, regulations, arcane rules. And nowhere is that more in evidence than with regard to political financing. PACs, in a long line of ironies, were a post-Watergate, early 1970s reform to clean up corruption. The overrepresentation of big money was thought best counteracted by regular folk being allowed to cartel up and pool resources, giving them a fighting chance in the moneyed arms race.
And then there was reform of the reform meant as final reform. Odious federal and state reporting laws were enacted. Legal language Swiss cheese-like holes, wide enough to match the Grand Canyon, were quickly found. Big money got around it all, as anyone with a modicum of sense would’ve predicted. By 2010 the Roberts Court upheld more than three decades’ old challenges to the concept of money as speech. Citizens United does seem to have settled the matter. Money is speech.
Key, of course, is the noun money. If a given crypto, or all, isn’t considered money then such cases mean little. Indeed, complications are numerous when its fifty states are put into play: in one instance, Colorado, is considering allowing crypto as a form of political donation; in another, Kansas outright forbade such an occurrence. Federal clarity on the issue could be an influential force for states also struggling with it.
Whatever the case, Coinbase is on another roll: not only has it formed a pack, but it snagged a giant hedge fund, became whitelisted on Facebook, and one of its founders, Brian Armstrong, was named a leading young executive.
What do you think about Coinbase’s PAC? Let us know in the comments section below.
Images via Pixabay, Twitter.
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