Crypto critic Molly White and Public Citizen researcher Rick Claypool have escalated their legal battle against Coinbase by filing an amended complaint on August 1, alleging violations of campaign finance laws. This move comes amid a strong rebuttal from Coinbase’s Chief Legal Officer, Paul Grewal.
Amended Complaint Details Alleged Campaign Finance Violations
The complaint centers around Coinbase’s alleged $25 million donation to Fairshake, a crypto-friendly super PAC, between March and May 2024. During this period, Coinbase was reportedly negotiating a contract with the United States Marshals Service, a federal agency, to provide custody and trading services for cryptocurrencies seized during law enforcement investigations. Coinbase ultimately secured this contract on July 1.
“In making these contributions of approximately $25.5 million, Coinbase violated federal campaign finance laws that expressly prohibit federal contractors from making contributions to political committees while negotiating or performing federal contracts,” the complaint asserts.
Coinbase’s Chief Legal Officer Rebuts Allegations
Paul Grewal, Coinbase’s Chief Legal Officer, has pushed back against these claims, branding them as “misinformation.” Grewal contends that Coinbase is not a federal contractor, arguing that the funds involved are not derived from congressionally appropriated tax dollars but from the DOJ’s Assets Forfeiture Fund.
“We remain committed to playing a trusted role for the U.S. Marshals Service’s cryptocurrency services requirement, which is funded by the sale of assets forfeited to the DOJ’s Assets Forfeiture Fund – not congressionally appropriated tax dollars,” Grewal stated.
White and Claypool’s Stronger Stance in Amended Filing
Despite Grewal’s rebuttal, White and Claypool reinforced their position in an amended filing on August 5. They argue that because the Assets Forfeiture Fund is a Congressional appropriation, Coinbase’s payment for the contract classifies it as a federal contractor.
“Since the Assets Forfeiture Fund is a Congressional appropriation, Coinbase was paid for the performance of a contract from funds appropriated by the Congress, and is thus a federal contractor,” the amended complaint reads.
Grewal responded to the updated filing, dismissing it as “a press release by another name” and asserting that the researchers’ interpretation does not align with existing law.
“Very simply, the worldview these researchers espouse in this document is not the law, as much as they wish it was,” Grewal commented.
Political Contributions and Allegations of Bias
Grewal also highlighted that Coinbase’s political donations were balanced between Democratic and Republican super PACs, with $500,000 allocated to House and Senate funds for each party for 2024. He criticized White and Public Citizen for suggesting a political bias that he claims does not exist.
“I look forward to the FEC enforcing its longstanding prohibitions against ‘pay-to-play,’” White responded, underscoring her commitment to seeing the Federal Election Commission take action against the alleged campaign finance violations.
This ongoing legal and public relations battle highlights the complexities and controversies surrounding campaign finance regulations and the involvement of major cryptocurrency firms in political processes.
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