Coinbase chief legal officer Paul Grewal denied allegations that the crypto exchange violated campaign finance laws by donating $25 million to a super political action committee (PAC) in May this year. In a report dated July 31, prominent crypto critic Molly White claimed that Coinbase appeared to have violated campaign finance laws by donating to the Fairshake crypto super PAC while actively negotiating a federal government contract.
Shocking Allegation Against Coinbase
Grewal, in a post shared on X on August 1, denied these allegations and stated that Coinbase was not a federal contractor under the plain language of Federal Regulations Code 111.51:
“USMS does not pay us with allocated funds, and this has been made clear publicly. This is misinformation, intentional or not.”
Coinbase donated $5 million to Fairshake in November 2023, $15.5 million in December 2023, and $25 million on May 30, 2024.
White claimed that the combination of Coinbase’s request for proposal on March 4, 2024, and a contract not ending before June 30, 2025, with the $25 million contribution on May 30, fell well within the prohibited period for contributions.
Government affairs lobbyist Dr. Craigh Holman told White that it is illegal for a federal contractor to make campaign contributions to any federal committee, including a PAC, and added that filing a complaint with the FEC would be appropriate.
Details on the Matter
In a follow-up comment on X, Grewal stated that all funds associated with the request for proposal were paid from the Asset Forfeiture Fund, which receives revenue from the sale of property forfeited to the U.S. Government under the jurisdiction of the Department of Justice. According to its website, Fairshake aims to help blockchain innovators achieve their goals by providing the ability to develop their networks under a clearer regulatory and legal framework.
Notably, Fairshake raised over $202 million this year and counts some of the largest firms in the crypto world, including Coinbase, among its donors. It currently stands as the largest super PAC for the 2024 elections.
