BOSTON – Crypto executives are finding a new investment opportunity: the longtime GOP rival of their industry’s leading critic in Congress, Sen. Elizabeth Warren.
More than a half-dozen cryptocurrency executives and prominent enthusiasts have donated to John Deaton, a political no-name who has achieved folk hero status in the crypto community by battling the SEC in a landmark crypto case last year. He moved to Massachusetts in January and registered as a Republican to run against Warren.
Deaton has virtually no chance of dethroning Warren in deep blue Massachusetts. But that hasn’t stopped crypto proponents from spending personal money to boost him — and potentially stump their Capitol Hill opponent.
The donations come from industry boosters including Anthony Scaramucci, the Winklevoss twins and executives at crypto firm Ripple.
“Elizabeth Warren represents the worst of American politicians,” said Scaramucci, a former Trump White House communications director and founder of the investment firm Skybridge Capital. “It is no longer about what is right or wrong for the country, but about what is left. So we’re going to do our very best to spend as much money as we can and raise as much money as we can to beat her.”
Ripple CEO Brad Garlinghouse and the company’s executive chairman and co-founder Chris Larsen both lowered the maximum contribution to $6,600 — half for the primaries, half for the general election, according to Deaton’s campaign. Deaton’s amicus brief in the SEC’s enforcement case against the company helped build his fame in the crypto world.
Scaramucci, the crypto evangelist who recently featured Deaton on his podcast, also made the most of Deaton.
Cameron and Tyler Winklevoss, co-founder of the controversial cryptocurrency exchange Gemini, each paid $6,600. Two other crypto executives, Ethereum and Cardano founder Charles Hoskinson and Casa co-founder Jameson Lopp, both donated the primary maximum of $3,300, according to data from Deaton’s campaign.
Deaton is also endorsed by Mark Cuban, who has criticized the SEC’s approach to crypto enforcement, and Perianne Boring, the founder and CEO of the Chamber of Digital Commerce which represents the blockchain industry, according to his campaign.
The donations come as the crypto industry is in the midst of a high-dollar effort to influence the 2024 elections in its favor. A network of crypto super PACs that started the year with more than $80 million in the bank has spent millions boosting industry allies and eliminating potential critics. Ripple and the Winklevoss twins are major backers of the PAC group, which also includes Fairshake, Defend American Jobs and Protect Progress.
The crypto PAC group has said its next targets are the high-profile Senate races in Ohio and Montana, where Democratic Sens. Sherrod Brown and Jon Tester – both crypto skeptics – face tough re-elections in states won by former President Donald Trump in 2020.
The election brings high stakes for the crypto industry, which is pushing hard for legislation that would help legitimize digital assets and overhaul the way they are regulated.
And Warren, a leading crypto skeptic, is a prime target. Massachusetts’ senior senator has strongly opposed industry-backed legislation and instead pushed for a crackdown by regulators that would strengthen rules against money laundering.
Deaton, a former Marine who opened a law firm in Rhode Island representing asbestos victims, is not explicitly guilty of his crypto law practice. But as Warren continues her efforts to strengthen oversight of the industry, Deaton is turning her efforts into a campaign cudgel. He criticized Warren this week for speaking out against an effort in the House of Representatives to pass legislation that would create a regulatory framework for stablecoins, cryptocurrencies tied to assets such as the U.S. dollar. Warren had cited concerns about illicit financing and warned that stablecoins pose a risk to the U.S. financial system.
Still, tens of thousands of dollars from the crypto world will not be nearly enough to support Deaton in his fight against Warren. Deaton lent himself $1 million of the $1.3 million he will report in the first six weeks of his bid, and has about $1.2 million in cash on hand. Warren, a former presidential candidate and champion of progressive causes nationally, raised more than $1.1 million from 29,622 donors in the first quarter of the year, with 99 percent of those contributions being $100 or less. She is a fundraising juggernaut and has more than $4.4 million in her campaign coffers, according to her campaign.
Warren’s campaign said in a prepared statement that her reelection efforts are fueled by small-dollar donors, “not by special interests seeking to elevate candidates. She continues her strong track record of delivering big wins for working families, including student debt relief and more than $50 billion in federal investments for Massachusetts.”
And while Deaton benefits from both his crypto backing and his ties to the Republican Charlie Baker circle — one of the architects of his campaign is a longtime political advisor to the very popular former governor, and his financial and polling advisors are also alumni of Baker’s political operation – he remains a relative unknown outside these activist circles. He has never run for public office before.
He could also face a primary challenger within the crypto community. Ian Cain, the chairman of the Quincy City Council just south of Boston and a blockchain enthusiast who co-founded the technology incubator QUBIC Labs, has filed paperwork to run for the seat as a Republican. Cain is currently trying to gather enough signatures to get on the ballot.