Crypto-Backed PAC Spends Millions to Unseat Anti-Crypto Lawmaker

The crypto industry is heavily involved in politics at the moment. The Fairshake PAC, which is backed by some very well known crypto firms like Ripple and Coinbase, spent more than $2 million against Democratic Representative Jamaal Bowman in New York's 16th Congressional District primary. Crypto firms have also recently made some huge contributions to PACs influencing elections. Amid the crypto politics in New York, Cumberland received a BitLicense from the NYDFS, allowing it to operate as a virtual currency company in the state. Meanwhile, David Hirsch of the SEC's Crypto Assets and Cyber Unit has announced his departure from the agency, and is now fighting off rumors claiming that he will be joining the meme coin platform Pump.fun.

Crypto Industry Flexes Political Muscle

The Fairshake group, a political action committee (PAC) that is backed by crypto firms like Ripple and Coinbase, has spent more than $2 million opposing the incumbent in the Democratic primary for New York’s 16th Congressional District. According to United States Federal Election Commission data, Fairshake's media campaign specifically targets Democratic Representative Jamaal Bowman’s reelection. A total of $9 million from outside interest groups was also spent against Bowman.

Bowman is facing off against Democrat George Latimer in a Jun. 25 primary. One of Fairshake's ads accused Bowman of spending his career "pushing dangerous conspiracy theories." However, high-profile Democratic lawmakers like Senators Bernie Sanders, Elizabeth Warren, and Alexandria Ocasio-Cortez have backed Bowman in response to earlier opposition ads from a different Super PAC.

Bowman's congressional record shows that he voted against the Financial Innovation and Technology for the 21st Century (FIT21) Act, the CBDC Anti-Surveillance State Act, and a resolution overturning an SEC rule on banks handling crypto. Latimer, who served in the New York State Senate from 2013 to 2018, has also made very few public statements on digital assets.

Moe Vela, a former Director of Administration for then-Vice President Biden, points out that while these ad attacks can rally voters, PACs should focus on more legislation rather than individual candidates.

PACs may have a bit more power than most people believe as they have already impacted other U.S. elections. California Representative Katie Porter lost a primary race for the Senate in March after being targeted by a Super PAC ad claiming she took campaign contributions from major industries. Porter later accused the crypto industry of trying to suppress discussions on digital assets.

With less than five months to go before Election Day in the US, the crypto industry remains heavily involved in politics. Coinbase, one of Fairshake’s original backers, donated another $25 million to the Super PAC in June, raising its total funds to around $160 million. Crypto mining executives have also launched a project to educate voters on Bitcoin (BTC) and influence elections.

Among the major party presidential candidates are U.S. President Joe Biden, Republican Donald Trump, Independent Robert F. Kennedy Jr., and Libertarian Chase Oliver. President Biden and Trump are scheduled for a televised debate on Jun. 27 ahead of their official nominations, and cryptocurrency is expected to be a hot topic.

Cumberland Approved for BitLicense in New York

Despite crypto politics heating up in the state, the New York State Department of Financial Services (NYDFS) has granted crypto trading firm Cumberland a BitLicense. This allows it to operate as a virtual currency company.

In a Jun. 17 announcement, Cumberland revealed its plans to establish strong trading relationships with institutional New York counterparties using the BitLicense. The firm is among only 33 companies listed on the NYDFS website holding such a license and claims to be one of the few principal trading firms with this authorization.

Since 2015, crypto firms in New York have generally been required to get a BitLicense to offer their products and services. Critics, including New York City Mayor Eric Adams, have argued for the elimination of the program as they believe it restricts innovation and economic growth.

New York authorities are currently involved in a case against Genesis Global Trading and crypto firm Gemini for allegedly defrauding investors through the Gemini Earn program. In January, Genesis agreed to pay $8 million and surrender its BitLicense as part of a settlement with the NYDFS. The New York Attorney General’s office also settled with Genesis and Gemini and ended up banning them from operating in the state and from running a crypto lending service.

Before the United States Securities and Exchange Commission (SEC) approved the listing and trading of a spot Bitcoin exchange-traded fund (ETF) on exchanges in January, Fidelity chose Cumberland as one of the firms to trade Bitcoin for the investment vehicle. Cumberland operates across North America, Europe, and Asia.

David Hirsch Steps Down from SEC Role

David Hirsch, the chief of the Crypto Assets and Cyber Unit division of the US SEC, has officially announced his departure from the agency. On Jun. 17, Hirsch shared on LinkedIn that he is leaving the financial regulator after almost nine years of service.

Reflecting on his time with the regulator, Hirsch shed some light on the more complicated and challenging investigations he was involved in and credited his success to the collaborative efforts of his colleagues and the support of mentors, leaders, and partners across regulatory and law enforcement agencies. He firmly believes that securities enforcement is a “team sport.”.

While Hirsch finds it difficult to leave the SEC, he is excited for the next set of challenges and plans to take a break and travel with his family before his son heads to college in the fall.

Hirsch has been an enforcement attorney for the SEC since 2015 and started his role as the chief of the agency’s crypto asset and cyber units division in October of 2022.

SEC Official Rejects Pump.fun Role Rumors

Interestingly, David Hirsch is now fighting off rumors that he might soon be joining Pump.fun. The recently retired SEC veteran confirmed that any claims associating him with the Solana-based meme coin platform are misinformation. Hirsch stated, “The claim is false. I have not announced my next role, but it is not with a meme coin platform.”

The rumors started circulating on Jun. 17 after a tongue-in-cheek social media post from Pump.fun, which congratulated Hirsch on his supposed new role as head of trading. The post humorously claimed that Hirsch launched over 100 coins himself and would oversee Pump.fun’s new internal trading desk, which is responsible for launching more than 1,000 coins per day.

This playful announcement led Binance’s team to congratulate Hirsch on his new role, which only ended up adding fuel to the rumors and speculation. Hirsch is now trying his best to set the record straight as he has not announced his next career move.