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U.S. crypto firms were heavily vested in President Donald Trump’s reelection in 2024, contributing upwards of $144 million towards his campaign. But “unchecked political spending” poses “profound risks,” according to a report published by the Center for Political Accountability (CPA), a nonprofit promoting transparency in corporate political contributions.

The report states that the crypto companies’ “aggressive push for deregulation, combined with opaque and unaccountable political contributions,” has raised “red flags among the regulators.” More importantly, it has “eroded investor confidence and public trust in the long-term viability of these companies.”

U.S. crypto firms’ political spending reached “an unprecedented scale” during Trump’s re-election campaign, especially Coinbase and Ripple, the report said.

Coinbase’s political action committee (PAC) donated over $79 million for Trump’s re-election, according to data from OpenSecrets, a platform that tracks political donations. Ripple was the second-largest donor among crypto firms with contributions exceeding $63.6 million.

Coinbase also donated $1 million to Trump’s inauguration committee while Ripple donated $5 million in digital assets. Additionally, Coinbase has committed to donating $25 million for the 2026 mid-term elections.

Tyler and Cameron Winklevoss, the founders of the crypto exchange Gemini, donated $1 million worth of Bitcoin (BTC) to Trump 47. Their donations exceeded the legal limit of $844,600 and they collectively received refunds of over $300,000.

All three exchanges were in hot water with the U.S. Securities and Exchange Commission (SEC) for years. In June 2023, the SEC charged Coinbase for operating as an unregistered securities exchange.

Ripple was embroiled in a legal battle with the SEC since 2020. In August 2024, Ripple secured a partial victory in court as the judge declared that XRP could not be classified as securities as they did not meet the Howey test. The SEC, however, has appealed the decision, which CEO Brad Garlinghouse has described as “insanity.”

Similarly, in January 2023, the SEC charged Gemini and Genesis for offering unregistered securities through their now-defunct Earn program. After a federal court denied the companies’ request to dismiss the SEC’s case, Genesis settled the case by paying $21 million. However, Gemini continued to fight.

Trump promised to fire SEC chair Gary Gensler, but Gensler resigned on Trump’s inauguration. Since then, the tables have turned and things have started to look up for crypto firms.

Last month, Cameron Winklevoss announced that the SEC dropped its investigation into the exchange. The company has now reportedly filed for an initial public offering (IPO) confidentially. Similarly, the SEC dismissed its case against Coinbase on Feb. 27.

Earlier this week, Trump also signed an executive order creating a Strategic Bitcoin Reserve.

The CPA report claims that crypto companies have been using political contributions to gain political clout. This strategy poses reputational, legal, and financial risks, and could backfire, not only jeopardizing the future of the companies involved, but the entire industry.

The report stated:

“As the [crypto] industry continues to seek influence through vast contributions and opaque financial maneuvers, the risks of instability, regulatory backlash, and public distrust only grow.”

The report also warned that historically, industries that prioritize short-term political gains over transparency and compliance often face grave consequences. This includes regulatory crackdowns and decline in consumer trust.

The CPA report also pointed out the conflicts of interests within the Trump administration that raise serious ethical questions. For instance, crypto investor David Sacks, Trump’s pick for ‘crypto czar,’ stands to make significant gains with the creation of the U.S. BTC stockpile.

Earlier this week, Sacks confirmed that he divested his personal crypto holdings before the start of the Trump administration. However, he is still a partner at his investment firm Craft Ventures, which holds stakes in crypto firms. Therefore, the investment firm, and thereby Sacks, could stand to profit from the U.S. government hodling Bitcoin.

“This specter of impropriety does nothing to assuage concerns about the pay-to-play nature of cryptocurrency,” the report noted.

The report also highlighted the dangers of political leaders promoting meme coins and fraud tokens. For instance, Argentinian President Javier Milei promoted a token called $LIBRA that lost around $4.6 billion within hours. Similarly, Trump promoted his own memecoin $TRUMP on 17 Jan. The token reached a peak of over $73 on Jan. 19, but has since lost over 83% of its value.

The CPA report concluded:

“Without greater transparency and accountability, the very future of crypto’s legitimacy in the financial world remains uncertain.”

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