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A mysterious new nonprofit group backed by the crypto industry has set up a mailing address about 100 miles away Washington D.C.and he is making films to exercise power in the country's capital.
The Cedar Innovation Foundation, a 501(c)(4) organization incorporated in Delaware in April, has launched ads against at least one powerful lawmaker who is up for re-election and quietly hired a group of strategists to fight on his behalf, according to records uncovered by CNBC.
is part of a broader effort by the crypto industry to influence Congress ahead of the 2024 election and as a variety of cryptocurrency-related bills begin to make their way through Washington.
The cryptocurrency market is trying to recover after a scandal-filled year that included the criminal fraud conviction of FTX founder and political mega-donor. Sam Bankman-Frito in November, followed by a agreement with the Prosecutor's Office for Binance founder Changpeng Zhao.
Crypto groups spent more than $18 million on lobbying last year, according to analysis by Reuters. The Cedar Innovation Foundation does not publicly disclose its donors or say on its website who runs the organization or where it is located.
Cedar Innovation is being largely funded by crypto industry players, with Coinbase He is likely to issue a check to the group before the end of the year, according to people familiar with the matter who asked not to be identified because the funding discussions were private. The group recently hired Mindset Advocacy, a lobbying group that worked for Goldman Sachs, Amazon Web Services and Barclaysaccording to a recent disclosure report and data from the nonpartisan organization OpenSecrets.
Dennis Kelleher, CEO of the nonprofit Better Markets, told CNBC that he predicts the industry will spend heavily this year trying to fend off lawmakers who criticize cryptocurrencies.
"What we are going to see in 2024 is a massive increase in cryptocurrency-funded 'dark' money campaigns against anyone who is not a cryptocurrency shill," Kelleher said. "By the end of the year, when it's all added up, I think the cryptocurrency industry will spend hundreds and hundreds of millions of dollars trying to defeat people who actually want to represent voters, instead of representing cryptocurrencies."
Josh Vlasto, a spokesman for the foundation and a veteran Democratic strategist who worked for former New York Gov. Andrew Cuomo and Sen. Chuck Schumer, D-N.Y., did not answer questions about the group's sponsors. In a statement to CNBC, he took aim at Kelleher and Better Markets.
โIt is not surprising that a Washington think tank funded by big banks and hedge fund managers is trying to destroy cryptocurrencies to preserve their monopoly on all Americans' access to money,โ Vlasto said.
Kelleher responded by saying Cedar Innovation was lying about Better Markets and called its organization an โindependent nonprofit.โ
A Coinbase spokesperson declined to comment and referred CNBC to the executives' public comments. in a mail Last month on
Since late last year, Cedar Innovation has been actively advertising on Facebook and Instagram, according to goal ad archive. The nonprofit has spent just over $27,000 on ads on the two Meta platforms, including ads calling for voters to call Senate Banking Committee Chairman Sherrod Brown, D-Ohio, to encourage him to take on the chairman. the SEC, Gary Gensler, a cryptoskeptic. The organization has also targeted industry critics Sens. Elizabeth Warren, D-Mass., and Roger Marshall, R-Kan.
"Anyone who knows my record knows that I will never bow to special interests or industry pressure, no matter how well funded I am with dark money from shady sources," Brown, who is up for re-election this year, told CNBC. "That's why I've been working on the Committee to protect families' money from the fraud, scams and abuse that is rife in this industry, and to stop its use to finance terrorism and other illicit activities."
Brown's office said neither the senator nor his staff have heard from the Cedar Innovation Foundation. Representatives for Warren and Marshall did not respond to requests for comment.
"We hope that Senator Brown and others do not bow to Wall Street banks and their special interests, especially when crypto innovation is the key to thousands of good jobs in Ohio, Kansas and across the country," Vlasto said in response to Brown. . "The Cedar Innovation Foundation, a nonpartisan organization, is committed to helping policymakers and the public understand what is at stake, while providing regulators with the tools they need during a time of transformative change."
'Political coup work'
The foundation says in a news release that it is "dedicated to helping congressional staff and policymakers by providing them with the tools and resources they need to better serve the American people and build America's innovation economy."
However, Kelleher said the ads he reviewed indicate the group is more focused on trying to attack the re-election efforts of Brown and other cryptocurrency critics.
"This is not an educational campaign," Kelleher said. "This is a political blow to Senator Brown because they want to defeat him in the next election."
Cedar Innovation is turning to experienced strategists to help with its influence campaign, according to records and people familiar with the matter.
By hiring Mindset Advocacy, the group hires four lobbyists with past ties to current and former members of Congress, according to LegiStorm.
Charlie Schreiber, a Mindset director who helps the foundation, previously worked for House Financial Services Chairman Patrick McHenry. One of the three bills the foundation plans to oppose is the Stablecoin Payments Clarity Act of 2023, legislation sponsored by McHenry that would change the way stablecoins are regulated.
A spokeswoman for McHenry's office did not respond to a request for comment.
The foundation has also hired Bullpen Strategy Group, a consulting firm founded and run by veteran Republican strategist Joe Pounder, according to a person familiar with the matter. Bullpen says on his website that he specializes in crisis communications, research and media intelligence.
Pounder did not respond to an email seeking comment.
Cedar Innovation has other political strategists working on its behalf, records indicate.
In Meta's advertising report for Cedar Innovation, a phone number for the organizer matches a cell phone number for Eric Coats, a longtime Illinois-based political consultant, according to a public database. Coats did not respond to questions about his role at Cedar Innovation.
Coats previously worked for Massachusetts Democratic Rep. Seth Moulton's congressional campaigns, as well as his leadership political action committee, according to Federal Election Commission records.
