Crypto executives put money behind longshot bid to oust Elizabeth Warren

BOSTON — Crypto executives are finding a new investment opportunity: The long shot GOP rival to their industry’s chief critic in Congress, Sen. Elizabeth Warren.

More than half a dozen cryptocurrency executives and prominent enthusiasts have donated to John Deaton, a political no-name who achieved folk-hero-like status in the crypto community for battling the SEC in a landmark crypto case last year. He moved to Massachusetts in January and registered as a Republican to take on Warren.

Deaton has virtually no chance of unseating Warren in deep-blue Massachusetts. But that’s not stopping crypto proponents from personally spending to boost him — and potentially blunt their Capitol Hill adversary.

The donations come from industry boosters including Anthony Scaramucci, the Winklevoss twins and executives at the crypto firm Ripple.

“Elizabeth Warren represents all of the worst things about American politicians,” said Scaramucci, a one-time Trump White House communications director who founded the investment firm Skybridge Capital. “It’s no longer about what’s right or wrong for the country, but what’s hard left. So we’re going to work our hardest to spend as much money as we can and raise as much money as we can to defeat her.”

Ripple CEO Brad Garlinghouse and the company’s executive chair and co-founder, Chris Larsen, both plunked down the maximum contribution of $6,600 — half for the primary, 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 notoriety in the crypto world.

Scaramucci, the crypto evangelist who recently hosted Deaton on his podcast, also maxed out to Deaton.

Cameron and Tyler Winklevoss, who co-founded the embattled crypto exchange Gemini, shelled out $6,600 apiece. 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 provided by Deaton’s campaign.

Deaton has also been endorsed by Mark Cuban, who has criticized the SEC’s approach to crypto enforcement, and Perianne Boring, the founder and chief executive of the Chamber of Digital Commerce that represents the blockchain industry, his campaign said.

The donations come as the crypto industry is in the midst of a high-dollar effort to sway the 2024 elections in its favor. A network of crypto super PACs that began 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 includes Fairshake, Defend American Jobs and Protect Progress.

The crypto PAC group has said its next targets include the high-profile Senate races in Ohio and Montana, where Democratic Sens. Sherrod Brown and Jon Tester — both crypto skeptics — are facing tough reelections in states won by former President Donald Trump in 2020.

The elections carry high stakes for the crypto industry, which is pushing hard for legislation that would help legitimize digital assets and overhaul how they are regulated.

And Warren, a leading crypto skeptic, is a prime target. Massachusetts’ senior senator has staunchly opposed industry-backed legislation and pushed instead for a regulatory crackdown that would strengthen anti-money laundering rules.

Deaton, a former Marine who opened a law firm in Rhode Island representing asbestos victims, isn’t explicitly running on his crypto advocacy. But as Warren continues her attempts to strengthen oversight of the industry, Deaton is turning her efforts into a campaign cudgel. He bashed Warren this week for coming out against an effort in the House to pass legislation that would create a regulatory framework for stablecoins, cryptocurrencies that are pegged to assets like the U.S. dollar. Warren had cited concerns about illicit finance and warned that stablecoins pose a risk to the U.S. financial system.

Still, tens of thousands of dollars from the crypto world won’t be nearly enough to sustain Deaton in his battle against Warren. Deaton loaned himself $1 million of the $1.3 million he’ll report raising in the first six weeks of his bid, and has roughly $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 coming in at $100 or less. A fundraising juggernaut, she has more than $4.4 million stashed in her campaign coffers, according to her campaign.

Warren’s campaign said in a prepared statement that her reelection effort is fueled by small-dollar donors, “not by special interests trying to elevate candidates. She is running on her strong track record of delivering big wins for working families, including student debt relief and more than $50 billion in federal investment for Massachusetts.”

And while Deaton is benefiting from both his crypto backing and from his ties to Republican Charlie Baker’s orbit — one of the architects of his campaign is a longtime political adviser to the highly popular former governor, and his finance and polling consultants are also alums of Baker’s political operation — he remains a relative unknown outside of those activist circles. He has never run for public office before.

He may also face a primary challenger from within the crypto community. Ian Cain, the president of the Quincy City Council just south of Boston and a blockchain enthusiast who co-founded the tech incubator QUBIC Labs, has filed paperwork to run for the seat as a Republican. Cain is currently attempting to collect enough signatures to get on the ballot.

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