Coinbase, one of the US’ leading cryptocurrency exchanges, has set up a political action committee, signalling its intent to influence legislation directly.
— Colin Wilhelm (@colinwilhelm) July 20, 2018
What is a political action committee?
An American phenomenon, PACs are organisations set up to raise money for a political campaign of some sort. This could mean action for or against a certain piece of legislation or political candidate. A group is defined as a PAC when it raises more than $1,000 for the purposes of influencing a federal election.
There are two different kinds of PAC – connected PACs are affiliated with a specific interest group, such as a business, industry, labour union or health organisation. Non-connected PACs are set up by members of the public for one specific issue. In 2015, there were 7,223 active PACs in the country, of which 4,115 were non-connected, and 945 were corporate.
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The organisation set up by Coinbase will thus be a connected, corporate PAC. Presumably, the goal will be to support cryptocurrency-friendly politicians in their careers.
According to the filing at the Federal Election Commission dated 22 July, the PAC had not raised or donated any money as of the end of June.
Coinbase is based in San Francisco and handles $65.6 million dollars’ worth of cryptocurrency trading daily, according to coinmarketcap.com. Recently it announced that it would try to add a few more cryptocurrencies to its list.
Its mobile phone application was at one point the most-downloaded finance application in the US, but the company has seen hard times recently, with its trading volumes and application download numbers falling drastically. The CEO said that this a reflection of a temporary downturn in the market, and not something to be concerned about.
According to CNN, in 2014 Coinbase donated approximately $3,000 to another PAC called BIT PAC, and in 2017 gave $78,000 to the campaign of one Brian Forde, who is running for election in California.
Last week, the New York Post reported that the Winklevoss twins, owners of a cryptocurrency exchange called Gemini, donated $100,000 to the governor of New York shortly before receiving approval from the authorities in that city to list a new coin.