San Francisco-based cryptocurrency exchange and wallet provider Coinbase has created its own political action committee (PAC), according to documents made public today, July 20.
In the U.S., PACs are organizations that pool campaign contributions from members with similar policy and political goals and subsequently donate them to political campaigns for or against candidates, legislation, or ballot initiatives. PACs must register with the Federal Election Commission.
Following the 2010 Supreme Court case of Citizens United v. FEC, PACs became the subject of some controversy, as some see them as means for corporate or union donors to contribute massive sums to political campaigns. In Citizens United, provisions that prohibited corporate or union political expenditure in political campaigns were overturned, making it legal for such entities to spend money from their general treasuries to finance political campaigns.
Such organizations are still prohibited from contributing directly to federal candidate campaigns, and therefore must rely on PACs. PACs must also abstain from coordinating any actions or materials with candidates. In some cases however, coordination has occurred. As of June 30, Coinbase has not raised any money through the PAC.
Coinbase has reportedly secured a $20 billion hedge fund for its custody service. People familiar with the matter told Business Insider that Coinbase is also looking to partner with other large hedge funds, ostensibly in a move to offer financing by the end of the year. Professor of law at Cornell University Robert Hockett said the decision to launch prime brokerage services is likely to catch the attention of the Securities and Exchange Commission (SEC):