The end of 2023 was not a great time for the crypto industry. In November, Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, learned that no amount of Michael Lewis gymnastics could save him from being convicted on seven charges of fraud and conspiracy. He was eventually sentenced to 25 years in prison after disappearing $11 billion of other people’s money. The following month, Sen. Elizabeth Warren sent letters to three crypto industry giants, the Blockchain Association, Coin Center, and Coinbase, criticizing them for undermining efforts to rein in crypto’s use in terrorist financing.
Around the same time, crypto groups began making noises about spending money in 2024 to defeat Ohio Sen. Sherrod Brown, the current chairman of the Senate Banking Committee. Brown is a profound skeptic of the industry and signed off on Warren holding hearings on crypto’s possible links to terrorism. Asked about the threats, Brown, a mop-topped Democrat with a raspy voice and wry sense of humor, said he was unconcerned.
“Bring ’em on,” he told reporters, according to Politico. “They’ve had a bad six months. They clearly have betrayed the public interest. If they think that’s the way to attack someone politically? Pretty amazing.”
Brown had no idea.
Rolling Stone has learned that crypto interests are set to spend $32 million on TV ads promoting Bernie Moreno, Brown’s Republican opponent, by the end of September, according to Democratic media buyers. The spending began on August 22 — meaning the crypto interests are spending more than $800,000 per day to flip the Ohio Senate seat, and potentially control of the Senate.
“Outside groups are spending record amounts to try to defeat Sherrod because they know he will always fight for Ohio, not special interests,” said Reeves Oyster, a Brown campaign spokesperson.
So far, the ads have been primarily fluffy positive spots boosting Moreno; some of the spots fearmonger about immigrants and China.
Tracing the roots of Defend American Jobs can be as convoluted as tracing crypto currency itself. The group is effectively a subsidiary of Fairshake — the second-largest fundraiser among Super PACs this season according to OpenSecrets, with over $200 million in its coffers. The bulk of Fairshake’s money has been donated by three crypto monoliths: Coinbase, Andreessen Horowitz, and Ripple.
Coinbase and its affiliates have donated $86 million. The founders of the venture capital firm Andreessen Horowitz have together given $44 million. Ripple has contributed $25 million. (The Winklevoss Twins, who donated nearly $5 million to Fairshake, previously tried to donate $1 million in bitcoin to Donald Trump — well beyond what is legal.)
Most of the money raised by Defend American Jobs has come through Fairshake. Coinbase, Ripple Labs, and the founders of Andreessen Horowitz have donated separately, too.
Coinbase’s CEO Brian Armstrong has led the latest charge to bring crypto into the political mainstream, hosting a Super Tuesday rally with Nas in Los Angeles where he proclaimed, “More Americans own crypto than own electric vehicles or are in a union — yet some people in D.C. are still underestimating how much and how many people care about crypto. In 2024, it will become clear that being anti-crypto is bad politics.”
Rep. Katie Porter found that out the hard way. During the California Democratic Senate primary, Fairshake spent over $10 million against her campaign, apparently because she had the temerity to question the energy uses of the industry. Porter didn’t make the runoff, losing to Adam Schiff, a longtime collaborator with crypto who received an ‘A’ rating from Stand With Crypto, a self-described grassroots advocacy hub nonprofit led by Coinbase and fronted by Armstrong. Porter got an ‘F.’
“I think in 2024, some people need to win an election or lose an election because of their crypto stance,” said Armstrong.
Brown’s skepticism about crypto has been long-standing and largely correct. Shortly after the 2022 Super Bowl featured a raft of celebrity ads promoting the industry, Brown spoke before the Senate Banking Committee.
“If you watched the Super Bowl on Sunday, you saw ad after ad for a product that most Americans have heard of, but almost nobody knows what it really Is,” Brown said. “Big crypto companies are looking to make big profits. They are desperate to reach as many Americans as they can. They brought in celebrities and gimmicks to make crypto sound exciting and daring and profitable, but the ads left a few things out. They didn’t mention the fraud, the scams, and the outright theft. The ads didn’t point out that you can lose big and crypto’s huge price swings. They didn’t tell you about the high fees pocketed by the crypto companies. They sure didn’t explain that the crypto markets lack basic investor protections and oversight. Watching those ads remind a lot of us of some asset bubbles we’ve seen before… We need to look beyond the unproven promises to protect Americans and our entire financial system.”
By the next Super Bowl, Bankman-Fried had been indicted and there were exactly zero crypto ads. Brown wasn’t done ringing the warning bell. On October 23, Brown sent the following tweet regarding alleged ties between crypto and foreign terrorists, including Hamas: “@SenateBanking is examining the financing behind terrorism & working to cut it off at the source. We’re looking at all options including sanctioning state sponsors of terrorism & their proxies & cracking down on cryptocurrency. We must do whatever we can to deny Hamas funding.”
Stand With Crypto gave the statement a ‘Very Anti-Crypto’ rating with a large thumbs down emoji on their website.
So maybe it shouldn’t come as a surprise that Fairshake’s affiliate has gone all in against Brown, especially since his opponent Moreno is a crypto evangelist who founded a property title blockchain startup in 2016. Still, the sheer amount of their expenditure is breath-taking.
From Sept. 4-9, Defend American Jobs spent $6.7 million on television in support of Moreno, more than the Brown campaign and other pro-Brown groups spent combined, and more than the Moreno campaign and other affiliated groups as well.
Not all Fairshake donors think taking out Brown is a great idea.
According to Politico, Crypto advocate and billionaire investor Ron Conway, a Democrat, exploded when he found out Big Crypto was going after Brown, especially since he was meeting with Senate Majority Leader Chuck Schumer about the possibility of crypto-friendly legislation being taken up in the lame duck session after the election. At that point, Conway was into Fairshake’s network for $500,000.
“How short sighted and stupid can you possibly be,” wrote Conway in a group email that included Armstrong, Andreessen Horowitz founders Marc Andreessen and Ben Horowitz, and Ripple head Brad Garlinghouse.
Conway’s complaint did not dissuade them. So far, most of the ads have been Moreno bio commercials with shots of Ohio farmhouses and back roads. But things are getting darker.
One of the ads says Moreno will stop “illegal immigrants from taking Ohio’s tax dollars.” A new ad features a shadowy outline of Brown and scare words about China, and reiterates that Moreno will “stop illegal immigrants from taking our hard earned tax dollars.”
Where they go in the last 50 days — immigrants eating cats propaganda? — is unknown.
A spokesperson for Fairshake declined to comment.
If crypto succeeds in unseating Brown, you may wonder who would replace him as chair of the Senate Banking Committee. That would be Republican Tim Scott.
Stand With Crypto gives him an ‘A.’
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