Becca Balint, a state senator running for Vermont’s single seat in the U.S. House of Representatives, received an unexpected campaign boost a month before primary day: an indirect donation of $1.1 million. dollars from a 26-year-old executive at crypto exchange FTX.
Balint won the primary earlier this month and is favorite to win November’s general election in the heavily Democratic state. She may not have needed or wanted the money from Nishad Singh, the head of engineering at FTX. His campaign manager, Natalie Silver, said Seven days, a local Vermont newspaper, that Balint’s staff did not interact with Singh. She called the campaign finance system that allows wealthy people to have an outsized impact on elections “bad for democracy.”
It might be, but that was just another day at the FTX office, where political donations are common. The United States Federal Election Commission’s Individual Contributions Database revealed more than 300 donation records ranging from $250 to several million dollars in contributions over the past two years from FTX employees.
Cryptocurrency’s anti-establishment ethos appeals to libertarian thinkers, but it’s also an industry dominated by a relatively young demographic, which generally leans towards the Democrats. The result is an industry that does not align neatly with either political party. At 30, Sam Bankman-Fried, the CEO of FTX, is a young billionaire who openly promotes a philosophy called effective altruism, which is about making decisions based on what will do the most good. Its political emphasis has been on pandemic prevention, reflecting a utilitarian-leaning mindset.
“This is definitely a new generation, a new kind of cohort, which is politically involved, which has an ideological makeup that’s never been seen before,” says Martin Dobelle, CEO of Engage Labs, a company providing campaigns with tools to accept cryptocurrency donations. “You see people who are more libertarian economically, but who are very progressive socially. So, mixtures that are not traditionally compartmentalized in one party or the other.
Naturally, the biggest contribution ever came from Bankman-Fried — it was a $10 million donation to the Protect Our Future fund, a political action committee heavily funded by the crypto billionaire and committed to electing candidates prioritizing pandemic prevention. Earlier this summer, Bankman-Fried said on the Pushkin Industries podcast that he planned to spend between $100 million and $1 billion on the 2024 U.S. presidential election campaigns. Although Bankman-Fried’s donations were geared toward Democrats, he also contributed to Republican campaigns.
Bankman-Fried also donated to Balint’s campaign, directly donating the maximum allowed, $2,900. Because Singh gave money through a PAC, he was not subject to this limitation. On July 9, he donated his $1.1 million to the federal LGBTQ Victory Fund political action committee, which then spent $991,911 on an ad campaign supporting Balint, Balint is the first woman and openly gay person to serve as president pro tempore of Vermont. Senate.
The extent to which the contribution helped Balint is open to debate. It came a day after she won the endorsement of Sen. Bernie Sanders, an independent linked to the Democratic Party, and Balint was already leading her biggest challenger, Lt. Governor Molly Gray, who criticized funding for the CAP.
“I was really excited about Balint because she is a strong supporter of pandemic prevention,” Singh said in a statement to Forbes. “Victory PAC wanted to run an independent spend to support Balint, I wanted to empower them to do so. My contribution here was personal and independent of my role at FTX.
Political spending fueled by Victory Fund donors is permitted thanks to a controversial Supreme Court decision in Citizens United v. Federal Election Committee, which allows businesses and non-campaign groups to support candidates and donate up to $5,000 per year, but also allows unlimited “independent spending” to support or oppose a candidate, provided this is done regardless of campaign efforts.
Singh has donated $7.9 million to Democratic PACs including Women Vote!, Mind the Gap — an organization run by Stanford University scholars using Silicon Valley funds to support Democratic candidates — and the Senate Majority PAC. Primal races are a prime target for wealthy donors looking to exert influence, as they are usually closer races and ultimately shape Congress.
“There are more opportunities in races open to primaries to support people because once people become incumbents they have an 80% re-election rate,” says Engage’s Dobelle. “I think it makes sense, in general, for defenders and activists of all stripes to get involved in the primary races.”
Bankman-Fried’s Protect Our Futures fund has spent $24 million to help support 18 Democratic primary campaigns across the country in 2022 through the end of July. In August, the PAC donated just over $1 million to support four Democratic primary candidates. However, Bankman-Fried is not the only FTX executive to contribute large sums to political causes: Ryan Salame, co-CEO of FTX, and Zach Dexter, CEO of FTX Derivatives, have also contributed large sums to political causes. campaigns and political action. committees.
The Engage Raise platform lists 15 candidates accepting campaign contributions in the form of cryptocurrencies. Eight are Democrats, six are Republicans and one is from the United Utah Party, a centrist political party active only in Utah.