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Last week, Public Citizen’s Rick Claypool and I filed a complaint with the Federal Election Commission based on my research into apparent campaign finance violations by the Coinbase cryptocurrency exchange.

Read the full complaint and my updated article.

Complaint: https://www.citizen.org/article/coinbase-fec-complaint/

Updated article: https://www.citationneeded.news/coinbase-campaign-finance-violation/

#crypto #cryptocurrency #Coinbase #Fairshake #USpol #USpolitics

COMPLAINT Coinbase, Inc. (“Coinbase”) is a cryptocurrency platform offering exchange, custody, and trading services. On March 20, 2024, Coinbase made a $500,000 contribution to the Congressional Leadership Fund (ID: C00504530), a hybrid PAC. On May 30, 2024, Coinbase made a $24,999,995 contribution to Fairshake (ID: C00835959), a super PAC. At the time of both contributions, Coinbase was negotiating a contract with the United States Marshals Service, a federal agency. In making these contributions of approximately $25.5 million, Coinbase violated federal campaign finance laws that expressly prohibit federal contractors from making contributions to political committees while negotiating or performing federal contracts. This complaint is filed pursuant to 52 U.S.C. § 30109(a)(1) and is based on information and belief that Coinbase violated the Federal Election Campaign Act of 1971 (“FECA”) prohibition on federal contractor contributions. If the Federal Election Commission (“FEC” or “Commission”), “upon receiving a complaint . . . has reason to believe that a person has committed, or is about to commit, a violation of [the Federal Election Campaign Act] . . . . [t]he Commission shall make an investigation of such alleged violation . . . .” 52 U.S.C. § 30109(a)(2) (emphasis added). BACKGROUND FECA prohibits a federal contractor from making contributions, directly or indirectly, to “any political party, committee, or candidate for public office or to any
building” if “payment for the performance of such contract or payment for such material, supplies, equipment, land, or building is to be made in whole or in part from funds appropriated by the Congress.” 52 U.S.C. § 30119(a)(1). The FEC has interpreted the prohibition on contributions to political committees as including contributions to hybrid PACs and independent expenditure-only political committees (“IEOPCs” or “super PACs”), a position they have made clear including in a statement regarding published after the 2011 Carey v. FEC decision. FECA additionally prohibits any person from knowingly soliciting any such contribution from a federal contractor. 52 U.S.C. § 30119(a)(2). The prohibition on campaign contributions from federal contractors applies from when a request for proposals is sent out or when negotiations commence (whichever is earlier) until the completion of performance under the contract or the termination of negotiations (whichever is later). 52 U.S.C. § 30119(a)(1); 11 C.F.R.§ 115.1(b) Coinbase is a federal contractor subject to the FECA prohibition Coinbase is a federal contractor, holding a current government contract with the United States Marshals Service (USMS), a federal agency within the United States Department of Justice. This contract has a $7 million obligated amount, and a $32.5 million total contract value. The USMS contract opportunity was first published on March 4, 2024, and offers were due on April 1, 2024.
CONCLUSION FECA and FEC regulations prohibit a federal contractor from making a contribution to any political committee during the period in which a federal contract is being negotiated or performed. According to the definitions of the prohibited time period outlined in FEC regulations, Coinbase was prohibited from making campaign contributions beginning on March 4, 2024. The prohibition will continue until the completion of performance under the contract or the termination of negotiations (whichever is later). As the contract is still ongoing, Coinbase has been prohibited from making any contributions from March 4, 2024 through to the date of this complaint. Consequently, there is reason to believe Coinbase violated the federal contractor contribution prohibition by making a $500,000 contribution to a hybrid PAC, the Congressional Leadership Fund, and a $24,999,995 contribution to a super PAC, Fairshake, during the period it was negotiating and/or performing its federal contracts. Furthermore, both the Congressional Leadership Fund and Fairshake are aware of the prohibition on accepting contributions from federal government contractors, and may have violated FECA and FEC regulations if they had reason to believe Coinbase was negotiating a federal contract at the time they solicited and/or accepted the contributions.

Coinbase appears to have violated campaign finance laws with a $25 million super PAC donation

Actively involved in contract negotiations with a federal government agency, Coinbase was likely prohibited from making its $25 million contribution to the Fairshake cryptocurrency-focused super PAC in May 2024.
Molly White (Citation Needed)
#crypto #cryptocurrency #uspol #uspolitics #coinbase #fairshake

reshared this

in reply to Molly White

Molly White
Molly White
• •

As I wrote in my earlier thread, these $25.5 million in illegal contributions ($25 million to crypto super PAC Fairshake and $500K to House Republicans) would be the largest campaign finance violation by a federal contractor by a significant margin:

https://hachyderm.io/@molly0xfff/112877515892173876

#crypto #cryptocurrency #Coinbase #Fairshake #USpol #USpolitics

Molly White

2024-07-30 21:16:44


SCOOP: Coinbase appears to have violated campaign finance laws with a $25 million donation to the Fairshake cryptocurrency super PAC, made while they were in active negotiations for a federal government contract.

https://www.citationneeded.news/coinbase-campaign-finance-violation/

#CitationNeeded #Fairshake #Coinbase #USpolitics #USpol #crypto #cryptocurrency



Coinbase appears to have violated campaign finance laws with a $25 million super PAC donation

Actively involved in contract negotiations with a federal government agency, Coinbase was likely prohibited from making its $25 million contribution to the Fairshake crypto super PAC in May 2024.
Molly White (Citation Needed)

#crypto #cryptocurrency #uspol #uspolitics #coinbase #fairshake
in reply to Molly White

Molly White
Molly White
• •

Coinbase’s Chief Legal Officer called my research “misinformation”, claiming that Coinbase is not a federal contractor despite its multi-million dollar federal contract.

I look forward to the FEC enforcing its longstanding prohibitions against “pay-to-play”.

#crypto #cryptocurrency #Coinbase #Fairshake #USpol #USpolitics

AWARD PROFILE Contract Summary https://www.usaspending.gov/award/CONT_AWD_15M50024FA4400016_1544_15M50024DA4400010_1544 Share Download Delivery Order (DO) PIID 15M50024FA4400016 In Progress (10 months remain) Unlinked Award Awarding Agency Department of Justice (DOJ) Recipient COINBASE INC 550 WEST 34TH STREET 4TH FLOOR NEW YORK, NY 10001-1304 UNITED STATES Congressional District: NY-12 Related Awards Parent Award Unique Key CONT_IDV_15M50024DA4400010_1544 Dates Today Start Date Jul 01, 2024 Current End Date Jun 30, 2025 Potential End Date Jun 30, 2029 $ Award Amounts $7.0 Million Current Award Amount $7.0 Million Obligated Amount $7.0 Million Potential Award Amount Outlayed Amount $0.00 Obligated Amount $6,978,346.66 Current Award Amount $6,978,346.66 Potential Award Amount $6,978,346.66 View Transaction History Description AFD: CRYPTOCURRENCY MANAGED SERVICES - CLASS 1 BASE YEAR POP JULY 1, 2024 TO JUNE 30, 32025 North American Industry Classification System (NAICS)Code 52 : Fin
Tweet by paulgrewal.eth (@iampaulgrewal) Aug 1, 2024 6:17 PM 1/3 Whether intentional or not, this is misinformation. Coinbase is not a federal contractor under the plain language of 11 CFR 115.1. USMS isn’t paying us with appropriated funds—something it made clear in the public RFP. Quoted tweet by Molly White (@molly0xFFF) July 30, 2024 5:15PM SCOOP: Coinbase appears to have violated campaign finance laws with a $25 million donation to the Fairshake cryptocurrency super PAC, made while they were in active negotiations for a federal government contract. https://citationneeded.news/coinbase-campaign-finance-violation/ Tweet by paulgrewal.eth (@iampaulgrewal) Aug 1 2/3 Image: Screenshot of the Code of Federal Regulations § 115.1 Definitions. (a) A Federal contractor means a person, as defined in 11 CFR 100.10 who— (1) Enters into any contract with the United States or any department or agency thereof either for— (i) The rendition of personal services; or (ii) Furnishing any material, supplies, or equipment; or (iii) Selling any land or buildings; (2) If the payment for the performance of the contract or payment for the material, supplies, equipment, land, or building is to be made in whole or in part from funds appropriated by the Congress. Tweet by paulgrewal.eth (@iampaulgrewal) Aug 1 3/3 Screenshot of a portion of the USMS Contract RFP: All funds associated with this RFP will be paid out of the Assets Forfeiture Fund. The Fund receives proceeds from the sale of property
#crypto #cryptocurrency #uspol #uspolitics #coinbase #fairshake
in reply to Molly White

Molly White
Molly White
• •

Coinbase Chief Legal Officer Paul Grewal has responded to the news of the FEC complaint by suggesting I have some shadowy backers funding me.

He’s also complained that we accused Coinbase of having partisan bias in who they support, something we did not allege or imply. We single out the donation to the Congressional Leadership Fund and not its Democratic equivalent because only the former happened within the prohibited period.

#crypto #cryptocurrency #Coinbase #Fairshake #USpol #USpolitics

#crypto #cryptocurrency #uspol #uspolitics #coinbase #fairshake
in reply to Molly White

Ben Ramsey
Ben Ramsey
• •
Is their argument that they’re not federal contractors (despite having a contract with the federal government) because the funds come from seized assets and not from Congressional appropriation?
in reply to Ben Ramsey

Jens Finkhäuser 🌻
Jens Finkhäuser 🌻
• •
@ramsey Their whole thing is "if I'm getting away with it, I'm right by definition", so that's not surprising.
@Ben Ramsey
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