U.S. crypto advocacy group tops 1 million members after Biden veto

By Andrea Shalal

WASHINGTON (Reuters) - Stand with Crypto, an advocacy organization for voters who own cryptocurrencies, saw its membership surpass 1 million on Wednesday, as crypto backers push politicians to create a new regulatory framework for the digital asset industry while averting more onerous compliance requirements.

Brian Armstrong, chief executive of Coinbase, an online platform for buying and selling crypto that helped launch Stand With Crypto last August, said the group's rapid growth showed the potential voting power of cryptocurrency users.

"It's a much bigger voting bloc than most people probably would have anticipated," Armstrong told Reuters.

The cryptocurrency industry is spending tens of millions of dollars in U.S. elections this year to boost crypto-friendly candidates and defeat those pushing for more regulation.

Coinbase on Monday announced a $25 million donation to the pro-crypto political action committee Fairshake, matching recent contributions from crypto payments company Ripple and tech-focused venture capital firm Andreessen Horowitz.

Stand with Crypto has targeted voters in swing states and now has nearly 24,000 members in Georgia, where Democratic President Joe Biden beat Republican Donald Trump in 2020 by 11,779 votes, and over 16,000 members in Arizona, where Biden won by just over 10,000 votes.

Armstrong said a surge in the group's membership was fueled by frustration over Biden's May 31 veto of a measure that aimed to overturn the Securities and Exchange Commission's accounting bulletin on crypto assets, and by strong support for the Republican-sponsored bill that would create a new legal framework for digital currencies.

The Republican-led House of Representatives passed the so-called Financial Innovation and Technology for the 21st Century Act last month with bipartisan support although the White House has said it opposes it. SEC Chair Gary Gensler has warned the bill could create new risks for investors and markets.

Coinbase officials have met with White House and Biden administration officials over the past several months on the issues, a source with the matter said.

Armstrong said he was not backing a presidential candidate because he felt crypto issues should be bipartisan to ensure passage of needed legislation.

But he said Biden's veto last week was clearly "a bad political move" given broad bipartisan support for the measure.

"I think that it's just bad politics to be anti-crypto. There's no voter constituency that you're winning over by doing that, but you are upsetting a huge number of Americans who've used this technology," he said.

Coinbase estimates that 52 million Americans have used cryptocurrencies, representing roughly one in five Democrats, Republicans or independent voters, Armstrong said. Many were frustrated that the rules for the industry weren't clear.

"They're looking to elect representatives that are aligned with their values," he said. He said it was unclear if people in the rapidly growing "voter bloc" would cast their votes in the November presidential election on the basis of digital asset issues, but that a subset certainly could.

The White House and the Biden campaign declined to comment.

Biden's campaign has stepped up its outreach to the industry and cryptocurrency users in recent weeks, a source familiar with the matter said.

Trump's campaign announced last month that it would accept donations in crypto. Biden's campaign had no immediate comment on whether it was accepting such donations.

(Reporting by Andrea Shalal; additional reporting by Hannah Lang; Editing by Caitlin Webber and Michael Perry)