JACKSON HOLE, Wyo. — A leading pro-cryptocurrency political group has dumped millions of dollars into high-profile Michigan and Arizona Senate races to back Democrats against Donald Trump-endorsed candidates, angering top Republicans who viewed the industry as an ally, not an opponent.
Fairshake PAC and its affiliated super PACs are reserving millions in advertising spending to influence three U.S. Senate races this cycle, and have announced commitments of about $3 million each to Democrats Rep. Ruben Gallego, who is running in Arizona, and Rep. Elissa Slotkin, a candidate in Michigan, it said on Wednesday.
The spending risks upending GOP efforts to secure seats in two key battleground states in the fight for control of the Senate and comes as top Republicans — amid a hostile regulatory environment — have leveraged their political capital to broker closer ties to the cryptocurrency industry.
When asked for comment, Fairshake referred NBC News to Slotkin and Gallego’s current A-ratings from Stand With Crypto, a nonprofit group advocating for the crypto industry. Both Democrats this year crossed party lines to support a historic crypto bill.
For years, Slotkin had expressed skepticism of cryptocurrency until an apparent change of heart in recent months. The Michigan lawmaker earned an F-rating from Stand With Crypto as recently as March.
Gallego, who is facing off against Republican Kari Lake, had failed in the past to back legislation that was supported by the crypto industry and, in 2022, praised on social media a candidate who “slayed the Crypto beast.” Last year, Gallego signed onto a letter, spearheaded by Sen. Elizabeth Warren, D-Mass., to address crypto-financed reforms, crediting her as an “outspoken advocate for regulation and oversight of crypto.” He has also criticized business owners like Elon Musk for “pushing Bitcoin” and profiting off cryptocurrency, and signed onto legislation perceived as hostile by the industry in years past.
Lake earned an A rating from the group Stand With Crypto for her strong statements about supporting the industry, and is assessed as “very pro-crypto.”
A spokesperson for Fairshake, Josh Vlasto, said in a statement that the super PAC and its affiliates are working to “support candidates who embrace innovation, want to protect American jobs and are committed to working across the aisle to get things done and oppose those who do not.”
The crypto industry and its aligned super PACs have amassed more than $100 million to spend in House and Senate races, part of an effort to shape a favorable regulatory landscape by bolstering crypto-friendly candidates. In Ohio alone, the group is targeting $12 million in support of a Republican Senate candidate running to unseat Democratic Sen. Sherrod Brown, chair of the powerful Committee on Banking, Housing and Urban Affairs, who is viewed by industry advocates as a crypto skeptic.
Fairshake is the leading PAC funded by digital asset firms, with its most significant contributions coming from a handful of donors: blockchain firm Ripple; individual donors affiliated with the venture firm Andreessen Horowitz; and Coinbase, the largest U.S. cryptocurrency exchange.
Republican operatives making the case for crypto say that it is a growth industry that the party has embraced for good reasons, and that these efforts will continue to pay off over time.
“The world has changed since Trump’s first term in office,” said Matt Mackowiak, a GOP strategist based in Austin, Texas. “The smart Republicans have seen that opportunity and have moved towards it. And it has multiple advantages: One, it is a source of fundraising. Two, it is a way to attract votes from a younger demographic. And three, it is an issue that can set up a contrast with the Democrats, and makes Republicans look like the party of the future.”
Now, simmering tensions are moving into the open as alarmed Republicans eye Fairshake, its affiliated super PACs and top backers with mounting skepticism. They warn that the groups risk losing sway with Republicans after working to cultivate hard-won relationships and are questioning the durability of Gallego and Slotkin’s support.
“It is reminiscent of when the Chamber of Commerce bankrolled a bunch of anti-business House Democrats who turned around and passed massive tax hikes on businesses with the so-called Inflation Reduction Act,” a senior GOP Senate aide said. “Now, the Chamber of Commerce can’t even get a meeting with House Republican Leadership to discuss their priorities.”
Congressional Republicans and the Chamber of Commerce have been on rocky terms in recent years after the business lobbying group became irate with Republicans for not supporting immigration reforms and not stopping Trump’s tariffs, both positions the group felt harmed American business. The chamber announced a willingness to back Democrats, a move that was unimaginable in the Obama era and that enraged many Republicans on the hill.
The aide continued: “It is surprising that whoever is advising Fairshake has come up with the same flawed strategy.”
One GOP strategist involved in Senate races warned that the spending risks hurting Trump as well since his allies are being attacked.
“Coinbase and Fairshake are attempting to become toxic to Republicans. Spending against two key GOP candidates could jeopardize the Senate and harm Trump,” said the source, who was not authorized to speak publicly so as not to get ahead of the former president. “Gallego and Slotkin have voted against bitcoin interests and would vote to confirm a far-Left SEC Chairman. It makes no sense.”
The spending was a hot topic of conversation as Republicans descended on Jackson Hole this week, alongside Marc Andreessen and representatives from Coinbase and other crypto groups, to attend consecutive retreats hosted by the Congressional Leadership Fund super PAC and House Speaker Mike Johnson, R-La. Andreessen and his business partner, Ben Horowitz, have endorsed Trump in the presidential race and criticized the Biden-Harris administration’s regulatory agenda and its promise to tax unrealized capital gains. Together, Andreessen and Horowitz are among Fairshake’s most significant donors.
“Republicans are WTF about what’s going on with Fairshake, and I think that’s a pretty bad omen for the industry, that people are wondering why our main trade association is pointing its arsenal at our friends,” said one industry leader who was granted anonymity to speak freely. “A lot of people are walking around the CLF conference astonished that this is the strategic chess move that the industry has made.”
A prominent member of Trumpworld likened the support “to a pro-Israel group giving money to the Squad.” A source familiar with the comments who was not authorized to speak publicly said the comparison suggests that Fairshake is supporting a cohort hostile to its interest.
Trump has promised to implement crypto-friendly policies if elected, culminating in a reversal of his stance from his time in the White House, when he criticized Bitcoin as “highly volatile and based on thin air.” Trump’s campaign now accepts Bitcoin donations, and his selection of running mate JD Vance was viewed as a win for the industry. Vance has called for looser regulation of crypto and disclosed that he has $250,000 to $500,000 worth of bitcoin among his assets.
Mackowiak said the shift is in part generational, with Vance credited with convincing a group of Silicon Valley investors to host Trump on their popular podcast and hold a San Francisco fundraiser that raked in millions.
A former Trump regulator said that a future Trump administration would invite “a more nuanced approach to regulation” around crypto but that a regulatory shift should be expected regardless of who wins the presidential race. “It’ll just be faster if you have a Trump presidency.”
Since taking over the Democratic Party’s nomination, Vice President Kamala Harris has begun seeking a “reset” with the crypto industry, with executives from Coinbase, Ripple and Kraken voicing their concerns to the White House during a Zoom call, according to Bloomberg. Democrats have launched a Crypto4Harris group that is seeking to formalize the industry’s ties to the presidential candidate. Top Harris surrogates are also signaling a more open environment should she win in November, with Maryland Gov. Wes Moore promising during a recent interview on CNBC that Harris would offer a regulatory framework that would be more business-friendly than under Biden.
The former regulator said many are still skeptical, however.
“The big political question here is, can Harris convince proponents of industry that she has done a 180, or is it just talk?” he said. “Because they will not believe that she will cross Elizabeth Warren.”
This article was originally published on NBCNews.com