The Center for Political Accountability (CPA) has warned against opaque political contributions from cryptocurrency companies like Coinbase and Ripple Labs, saying they could erode public trust and pose serious financial and legal risks.

The Risks of Untransparent Political Contributions

In a new report, the CPA highlights that cryptocurrency companies spending millions of dollars on political campaigns could influence the legislative process and pose reputational, legal, and financial challenges. Coinbase and Ripple Labs are two of the companies that have come under fire for directly contributing nearly $52 million in political donations, with Coinbase accounting for $40.5 million.

In addition, super PACs like Fairshake have spent around $40 million to support pro-crypto candidates, helping to reshape the US Congress after the November 2024 election in a more industry-friendly direction.

Regulatory policy changes

Following leadership changes at regulators like the US Securities and Exchange Commission (SEC), many enforcement actions against crypto companies, including Binance, Coinbase, and Kraken, have been canceled or suspended. The CPA attributes this to huge political contributions from the crypto industry to push for deregulation.

However, the CPA also warns that using political contributions to influence government could put the industry at greater risk in the future. According to the report, pouring money into congressional and presidential races not only attracts attention but can also lead to stricter regulations, increasing uncertainty in the industry.

Call for transparency and accountability

The CPA stressed that investors need to consider political spending by crypto companies as an important risk factor, similar to financial reporting or business strategy. In the context of the lack of transparency and oversight in crypto, failing to strictly control political contributions can have serious consequences.

To mitigate these risks, the CPA called on shareholders and regulators to require clearer information disclosure on political donations and promote responsible corporate governance. Establishing transparency measures and strict oversight not only helps protect public trust but also lays the foundation for the sustainable development of the crypto industry in the future.