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Molly White

4 weeks ago • •

Molly White
4 weeks ago • •

Coinbase Chief Legal Officer Paul Grewal weighed in on my reporting about the company’s apparent campaign finance violations, arguing that Coinbase is not a federal contractor.

I have updated the article to include his comments, and I’ve also noted that this argument does not seem to square with the law.

The article, with these updates, is here: https://citationneeded.news/coinbase-campaign-finance-violation/

More to come soon.

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

Tweet thread by Paul Grewal (paulgrewal.eth, @iampaulgrewal):
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 sharing the article)

2/3
Screenshot of 11 CFR 115.1:
§ 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.

3/3 Screenshotted image: All funds associated with this RFP will be paid out of the Assets Forfeiture Fund.

Coinbase’s response
A Coinbase spokesperson, reached on July 30, declined to answer questions about which entities were associated with the government contract or the political contribution, or to respond to broader inquiries about the apparent campaign finance violation. They stated only that “Coinbase complies with all applicable laws, including campaign finance law.”

Two days after this article was published, Coinbase’s Chief Legal Officer, Paul Grewal, took to Twitter to argue that the company’s political contributions were not in violation of campaign finance laws. He further condemned this article as “misinformation”, which he insinuated may have been “intentional”.

Grewal asserted that Coinbase is not a federal contractor, and thus is not subject to the prohibition, pointing to a definition of the term within the Code of Federal Regulations as those who are paid “in whole or in part from funds appropriated by the Congress”.14 He also pointed to a Q&A document that was published as an update to the request for proposals (RFP) on April 18, and which contains questions between (unidentified) prospective contractors and answers from the US Marshals Service. One such Q&A entry identifies the Department of Justice’s Assets Forfeiture Fund as the source of the funding for the contract ultimately awarded to Coinbase. “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 publ

(Screenshotted image:) What is the source of the funds used to pay for the Cryptocurrency Management and Disposal Services requested under this 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 forfeited to the U.S. Government under the Department of Justice Asset Foreiture Program.

While this Q&A document seems to be what Grewal is drawing upon for his claim that the Marshals Service “made clear in the public RFP” that they would not be “paying [Coinbase] with appropriated funds,” there does not appear to be any statement within the RFP that explicitly addresses whether the funds for the contract are appropriated from Congress or not.

Lawyers at Public Citizen weighed in: “Grewal’s argument that funds in the Assets Forfeiture Fund are not ‘appropriations’ is incorrect. Just this year, the U.S. Supreme Court rejected a similar contention, making clear that an appropriation is simply ‘a law that authorizes expenditures from a specified source of public money for designated purposes’. Consistent with the Court’s holding, a report16 published by the Congressional Research Service explicitly describes the Department of Justice’s Asset Forfeiture Fund as appropriated by Congress.”

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)}

Lisa Melton reshared this.

in reply to Molly White

FediThing 🏳️‍🌈

in reply to Molly White • 4 weeks ago • •

If they're bothering to respond, it shows you've hit a nerve 👏

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