Alleged Violations
On July 30, crypto researcher Molly White accused Coinbase of potentially violating campaign finance laws. She highlighted a $25 million donation by the crypto trading platform to Fairshake, a Super Political Action Committee (PAC) focused on cryptocurrency.
White noted that this donation took place while Coinbase was negotiating a federal contract with the US Marshals Service (USMS). The contract, awarded in July, required Coinbase to provide custody and trading services for digital assets seized during law enforcement investigations.
Federal laws prohibit political contributions from entities involved in federal contracts to avoid any influence over the contract awarding process. White emphasized that if this donation violated campaign finance laws, it would be the largest such violation. Past violations typically involved around $1 million.
Coinbase’s Response
Paul Grewal, Coinbase’s Chief Legal Officer, dismissed White’s claims as misinformation. He asserted that Coinbase was not a federal contractor under 11 CFR 115.1. He also clarified that USMS did not pay the firm with appropriated funds. Grewal stated:
“Whether intentional or not, this is misinformation. Coinbase is not a federal contractor under the plain language of 11 CFR 115.1. USMS isn’t paying us with appropriated funds—something it made clear in the public RFP.”
Grewal provided images showing that the cited regulations defined a government contractor as an entity paid with Congress-appropriated funds. He clarified that Coinbase’s payment comes from the proceeds of forfeited assets, not USMS funds. An additional image from Grewal stated:
“All funds related to this RFP will be drawn from the Assets Forfeiture Fund, which collects proceeds from the sale of forfeited property under the Department of Justice Asset Forfeiture Program.”
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