The Impact and Beneficiaries of the Encryption Industry in the U.S. Elections

On November 6, 2024, the United States witnessed a dramatic presidential election. Trump was successfully elected, and this president, known as a "encryption supporter," may bring new opportunities for the encryption industry at the policy level. Meanwhile, the price of Bitcoin broke through the $75,000 mark, setting a new historical high. Behind this series of events lies a complex web of interests and potential beneficiaries.

Encryption Lobbying: Comprehensive Influence from Legislators to Presidents

In May of this year, the U.S. House of Representatives passed the "21st Century Financial Innovation and Technology Act" with an overwhelming majority of 279 votes in favor and 136 against. This Republican-led bill aims to establish a regulatory framework for digital assets and promote the development of the encryption industry. The passage of the bill cannot be separated from the massive campaign spending by the encryption community.

According to statistics from data tracking platforms, political action committees supporting encryption have invested over $133 million in elections, influencing 51 campaigns. These committees primarily support candidates who promise not to impose strict regulations on encryption. The three most active political action committees are Fairshake, Protect Progress, and Defend American Jobs.

The rise of these super political action committees is attributed to a Supreme Court ruling in 2010 that allowed corporations and unions to spend unlimited amounts on political activities. Subsequent related rulings further established the legal status of "super political action committees," enabling them to accept and allocate unlimited contributions as long as they do not coordinate directly with candidates or parties.

For example, Fairshake invested heavily in elections in California and New York. Although some of the candidates it supported lost in the primaries, the committee continued to support bipartisan candidates. In the Ohio Senate race, Defend American Jobs spent over $40 million supporting Republican candidate Bernie Moreno.

Protect Progress has provided funding support to several Democratic members of Congress, including Elissa Slotkin, who voted in favor of the "21st Century Financial Innovation and Technology Act," and Ruben Gallego, who believes that encryption is crucial for technological innovation and economic growth.

Political Donations from Encryption Institutions

By analyzing political donation data, we can gain insights into the funding sources behind the political stage. In Trump's political action committee Trump 47, Winklevoss Capital Management, founded by the founders of the cryptocurrency exchange Gemini, is the second largest donor, contributing approximately $2.366 million.

Another political action committee called Right For America has raised a total of $68.46 million this year, including a $5 million donation from the founder of the well-known venture capital firm A16Z. It is worth noting that donations from the encryption industry are not limited to a single political party; many donors do not have a clear partisan inclination, and their goal is to elect politicians who are friendly to cryptocurrencies.

In terms of institutions, the main donations come from three cryptocurrency exchanges: Coinbase, Ripple, and Jump Crypto, totaling approximately $108 million. A16Z also invested $45.2 million. A report from a nonprofit watchdog organization shows that nearly half of the corporate funding flowing into the elections comes from the encryption industry.

The Future Layout of the Encryption Industry

As the regulatory framework for cryptocurrencies in the United States gradually improves, leading exchanges, venture capital firms, and foundations have begun to position themselves. On the donor lists of three major super political action committees, aside from well-known institutions like A16Z, Coinbase, and Ripple, Multicoin appears on the donor lists of all three PACs with a relatively small amount, which is noteworthy.

Although the cryptocurrency industry harbors the ideal of decentralization, the game with regulators will still be a long-term process. In this game, various forces are influencing the formulation and implementation of policies in different ways, paving the way for the future development of the industry.