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Economic Policy


IN CRITICAL OHIO SENATE RACE, CRYPTO CASH LOOKS TO TIP THE SCALES


THE INDUSTRY HAS SPENT OVER $38 MILLION ON ADS TOUTING BERNIE MORENO, THE GOP
CANDIDATE, AS IT LOOKS TO SEND NEW ALLIES TO WASHINGTON IN 2024

12 min
58

(Illustration by Elena Lacey/The Washington Post; TWP; iStock)
By Tony Romm
September 23, 2024 at 6:00 a.m. EDT

Bernie Moreno smiles and crosses his arms, as sparks fly around steelworkers in
the distance. A narrator introduces the Ohio Republican vying for U.S. Senate,
touting his promises to create jobs, combat illegal immigration and keep local
families safe.

The 30-second advertisement has blanketed televisions across the Buckeye State
in the final weeks of the 2024 election. But it is not the work of Moreno’s
campaign: It is financed by the cryptocurrency industry, which has started
pouring money into Ohio as part of an aggressive, nationwide bid to tilt
Congress in its favor.



Major crypto companies, executives and investors have spent more than $38
million recently to help elect Moreno, according to a Washington Post analysis
of federal records and ad data, part of an expensive national quest to fend off
unwanted regulation in Washington. These crypto interests have primarily
funneled their support into a network of obscurely named super PACs, which have
blitzed Ohio airwaves with glowing biographical ads about the GOP candidate.

The burgeoning relationship is symbiotic. In Moreno, 57, the nation’s crypto
magnates see a kindred spirit: a former currency owner and entrepreneur who has
publicly promised to “lead the fight to defend crypto in the U.S. Senate." The
crypto cash, in turn, has helped introduce and promote Moreno to voters, while
he hopscotches to industry gatherings across the country to tout his tech bona
fides and solicit campaign checks.

“Today, in the United States Senate, you don’t have people who know how to use
email and we’re asking them to regulate digital currencies,” Moreno told crypto
enthusiasts in Austin this spring. “You need to have people who have a basic
understanding, otherwise they’re driven by special interest groups that will
tell them, ‘I need you to vote this way or that way.’”

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For many Ohio voters, crypto hardly counts as a leading political issue in a
race that could determine which party will control the Senate next year. But the
state has still emerged as a battleground in the fight over the future of
finance because Moreno’s opponent is Sen. Sherrod Brown (D), the chairman of the
Senate Banking Committee, which oversees cryptocurrency and the federal agencies
that regulate it. He has previously endorsed stricter government oversight of
the industry.

Moreno declined to be interviewed for this story. His spokeswoman, Reagan
McCarthy, pointed to a local report estimating that 2 million Ohio voters own
some form of digital currency — a figure similarly touted by some in the crypto
industry.

“Unlike Sherrod Brown, who doesn’t know the difference between blockchain and a
chain saw, Bernie has a deep understanding of the technology, what it takes to
make certain it develops here in America, and will work to ensure America leads
the world,” she added.

“Outside groups are spending record amounts to try to defeat Sherrod because
they know he will always fight for Ohio, not special interests,” Reeves Oyster,
a spokeswoman for Brown’s campaign, said in a statement. The senator also
declined to be interviewed.

The surge of crypto spending in Ohio underscores the industry’s rapid political
awakening, roughly two years after the collapse of FTX -- one of the world’s
largest token marketplaces -- rattled policymakers around the world.



“This is an industry that’s new, lightly regulated [and] doesn’t want to be
regulated,” said Ian Vandewalker, a senior counsel at the Brennan Center for
Justice, which advocates for limits on election spending. “They are very much
trying to use election spending to affect federal policy in a way that will help
their bottom line.”

Crypto groups dialed up hefty campaign checks to lawmakers earlier this year,
part of a successful lobbying barrage to help advance a House measure that would
neuter the Securities and Exchange Commission, the first major bill affecting
the crypto industry. Industry donors also contributed heavily to former
president Donald Trump, who later promised at a bitcoin gathering in July to
turn the United States into the “crypto capital of the planet,” a departure from
his past criticism of the technology.

And major crypto backers financed a trio of new super PACs, which can spend
unlimited sums on political advertising. Led by the organization Fairshake, the
funders include the crypto exchange Coinbase and its chief executive, Brian
Armstrong; the payment platform Ripple; and top crypto investors, such as the
venture capital firm Andreessen Horowitz.

Coinbase and Ripple have warred with the SEC over allegations that they have
violated federal investor protection laws. They deny the charges, instead
accusing Chairman Gary Gensler of unfairly targeting the industry.

“The 52 million Americans who own crypto have been drowned out by a small
minority of partisan legislators for too long," Paul Grewal, the chief legal
officer of Coinbase, said in a statement. “Coinbase is laser focused on crypto -
not partisan politics - and we’ll keep empowering crypto voters to make their
voices heard.”

By early September, Fairshake and two affiliates — Defend American Jobs and
Protect Progress, which focus on Republicans and Democrats, respectively — had
amassed a total war chest exceeding $169 million, spokesman Josh Vlasto
confirmed. So far, they have spent about $130 million on advertising, according
to federal records and data from AdImpact, a monitoring firm, intervening in 51
races primarily to help candidates who have promised not to harshly regulate
crypto.

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In taking aim at Ohio, the Fairshake network this fall mounted its most
aggressive political gambit, hoping to replace Brown, a senior Democrat and
crypto skeptic, with Moreno, a Republican who has long extolled the virtues of
cryptocurrency. The GOP candidate reportedly has claimed the “Founding Fathers
would have been bitcoiners,” for example, and he has linked some federal
regulation around the industry to “tyranny.”

“It’s really a double win for the crypto industry if they push Moreno over the
finish line,” said Christopher Devine, a professor in political science at the
University of Dayton. “They have a strong advocate in him,” while
simultaneously, “they’re pushing out someone who’s basically going to lead the
regulatory efforts against them.”

The GOP-leaning Defend American Jobs super PAC hit Ohio airwaves with the first
30-second spot in late August, pitching Moreno — the scion of a politically
connected family, who emigrated from Colombia as a child — as a rags-to-riches
success who would “protect Ohio jobs, lower everyday costs and keep our
communities safe.”

The ad barrage continued into September, at which point Defend American Jobs had
reserved over $38 million in ads in major Ohio media markets, according to
AdImpact. The crypto-funded super PACs have outspent Moreno’s own campaign, the
data show, and they have signaled they could unleash a digital ad blitz soon
focused on voter turnout. The groups by law must operate independently from the
campaign.

“Our mission is clear — 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,” Fairshake said in a statement last
month.

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None of the spots so far mention the crypto industry, or its financing of the
ads, obscuring the role its top companies and executives have played in the
race. Fairshake aides declined to comment for this story.

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“Quite frankly, those ads, they don’t lead you to any belief that they’re
attached to crypto,” said James B. Renacci, a former Republican congressman who
ran unsuccessfully against Brown in 2018. “It’s not an issue anyone is talking
about.”

Barnstorming the state in a bright red bus bearing his visage, Moreno himself
rarely mentions one of his leading corporate benefactors in stump speeches that
tend to be heavy on vocal impressions of Brown and crowd-pleasing broadsides
about an influx of undocumented immigrants.

When he stepped in front of the lectern at a community center in Cleveland
earlier this month, he joked about the rising cost of fast food at McDonald’s,
and warned that Democratic control of Congress and the White House would plunge
the United States into political chaos.

“In one generation, this country will look like Venezuela,” Moreno told the
crowd before signing autographs. “That’s not hyperbole.”

A former car salesman, Moreno has long immersed himself in blockchain
technology, a registry of ownership that essentially underpins all
cryptocurrency. He founded a blockchain firm, called Ownum, in 2018 that
unveiled a product to help states use the technology to track car titles.

Before entering politics, Moreno helped organize local blockchain-related
conferences, and he led a since-abandoned effort to redevelop a portion of
Cleveland into a start-up hub. When Ohio became the first state to allow
residents to pay their taxes using bitcoin, Moreno jumped at the opportunity,
joining Josh Mandel — then the state treasurer, and a future political rival —
for a photo to commemorate the transaction.

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Moreno mounted his first Senate bid in 2021, but dropped out of a crowded
primary that ultimately resulted in the election of Sen. JD Vance (R), who is
now Trump’s running mate. At the time, Moreno owned as much as $250,000 in
bitcoin, according to federal financial disclosures. But he sold it all in March
2023, according to his campaign, a transaction Moreno described previously as an
attempt to deny “Democrats more than they already have in terms of running
stupid ads.”

Emerging victorious from another crowded GOP primary in March, Moreno soon
appeared to intensify his national courtship of crypto. Some local Republican
strategists saw the outreach as part of a scramble to ensure Moreno could keep
pace with Brown in one of the most expensive Senate contests in the nation.

Moreno stumped at an industry conference in Washington in May to discuss how to
“elect a pro-crypto Congress.” Afterward, he stressed that the industry needs
“regulatory certainty,” echoing an argument raised by lobbying groups, including
the Digital Chamber, which hosted the event. The group did not respond to a
request for comment.

“I don’t change my point of view because somebody gave me a $1,000 check,” he
said during an interview after his panel. “That’s not why I’m running for
office.”

Weeks later, Moreno appealed to crypto enthusiasts in Austin, calling his
campaign a referendum on the technology itself. “If Donald Trump wins, and I win
my race, which means we control the U.S. Senate as Republicans, we have a shot …
at making sure this industry grows and thrives here in the United States,” he
told the friendly crowd.

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And Moreno jetted to an annual gathering of bitcoin owners in July, held this
year in Nashville, where Trump similarly looked to harness crypto cash and
support. He took the stage alongside fellow Senate GOP aspirants and the leader
of the Bitcoin Freedom PAC, a super PAC tied to the conservative-leaning Club
for Growth, which aims to “remove anti-bitcoin senators,” including Brown. The
group did not respond to multiple requests for comment.

“Are you sick of these politicians who say bitcoin is for drug dealing and money
laundering?” Moreno asked the crowd. “That’s what this election is about.”

The organizer of the conference — David Bailey, one of Trump’s crypto allies —
later said Brown “put a big target on himself, and there are a lot of people in
our industry that are very eager to support Bernie Moreno.”

Asked about the courtship, McCarthy, a spokeswoman for Moreno, instead attacked
Brown for being “bankrolled by big banks, big pharma, and countless other
corporate interests.”

Over the past year, Moreno has blasted “left wing radicals" who seek to regulate
crypto. He has said that lawmakers seek only to restrain it because it poses an
“existential threat to the people who want to control our lives.” And Moreno has
sharply spoken out against specific federal rules: When the SEC finalized new
accounting standards that would require greater disclosure of crypto on
companies’ balance sheets — a major target of industry ire — the candidate
called it “one of the most egregious examples of deep state overreach in
American history.”

Moreno’s proclamations have endeared him to crypto executives, including Brad
Garlinghouse, the chief executive of Ripple Labs, one of the financiers of
Fairshake. The two huddled on the sidelines of the Republican convention in
Milwaukee this July, and Garlinghouse later donated to Moreno’s campaign.

“I don’t agree with him on all points, [but] I was impressed with his
candidacy,” he said in an interview.

The outreach has also earned Moreno an “A” rating from the Stand With Crypto
Alliance, a group that aims to turn out digital currency owners on Election Day.
Backed by companies including Coinbase and Gemini, the trading platform founded
by Tyler and Cameron Winklevoss, the nonprofit claims it has helped direct $179
million in voter donations to crypto-friendly candidates this cycle.

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Stand With Crypto typically endorses candidates after analyzing their public
statements, and in some cases, asking them to complete a survey. The
questionnaire requires office-seekers to say, for example, whether they would
vote in Congress for a bill that would weaken SEC authority over crypto,
according to a copy viewed by The Post. Gemini declined to comment.

“Ohio is, I think, a critical battleground for the future of crypto,” said
Coinbase’s Grewal during an appearance on Bloomberg Television this month. “For
both Senator Brown and Mr. Moreno,” he added, “it’s going to be critical to pay
attention to what their voters want.”

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