By Caitlin Ostroff and Vicky Ge Huang
Bernie Moreno will support manufacturing jobs in Ohio, protect social security and be tough on immigration when he is elected to the U.S. Senate. At least that is according to a campaign ad that has been viewed more than 160 million times.
What the video doesn't address is his stance on crypto -- the industry that funded the 30-second clip and emerged as one of the biggest advertising spenders of this election cycle.
A trio of super political-action committees are seeking to elect candidates like Moreno to pass crypto legislation in Congress that would allow the industry to operate unfettered in the U.S.
The super PACs deployed more than $62 million on ads in September -- their largest monthly sum to date, according to a Wall Street Journal analysis of data from ad-tracking firm AdImpact. Together, the PACs have raised nearly $170 million from an industry A-list that includes crypto exchange Coinbase Global, Cathie Wood's ARK Investment Management and venture-capital firm Andreessen Horowitz.
Yet one thing the ads all have in common? None of them actually mention crypto.
Instead, the ads focus on domestic jobs, immigration and other wedge issues at the heart of the election. The strategy isn't necessarily an unusual one in political advertising -- the environmental and pro-Israel lobbies are among the other groups whose messaging might appear off topic to some viewers. This election cycle, however, marks the first time that the crypto industry has exerted similar financial power.
Crypto "is not an issue that moves the vast majority of voters," Moreno said in an interview, while adding that the ads do a good job introducing his messaging to the electorate.
A former car dealer, Moreno is the founder of a blockchain startup that focuses on property titles. He has been a longtime crypto supporter, frequently speaks at crypto conferences and accepts campaign donations in bitcoin.
The Ohio Republican is looking to defeat Democratic incumbent Sherrod Brown -- one of the loudest crypto critics on Capitol Hill -- in a race with high stakes for the industry. In September, the super PACs pumped $30 million into TV, streaming and digital ads for Moreno, by far the most of any other congressional candidate.
"When I win, there's no question that the crypto industry will have played a pivotal role in making that happen," said Moreno.
Crypto companies have been on the defensive since the 2022 market meltdown that culminated in the collapse of exchange FTX. Founder Sam Bankman-Fried and members of his team were among the biggest political donors in the 2022 midterm election cycle, contributing more than $70 million in less than 18 months. Bankman-Fried, who is serving a 25-year sentence in prison for fraud, personally donated $40 million.
The Securities and Exchange Commission has since sued Binance, Coinbase and other crypto platforms, claiming they sell tokens that should have been registered with the agency as securities. The lawsuits have galvanized the companies to push back against the agency and campaign for new legislation to regulate the industry.
Former President Trump emerged as an unlikely ally of the crypto industry in recent months. He pledged to create a strategic bitcoin reserve to hold the nation's supply and fire Gary Gensler, the chair of the SEC who is leading the fight to police the sector.
Support for crypto legislation has gained traction among some members of Congress. In May, the House passed a bill that would have expanded the ability of the Commodity Futures Trading Commission to be a crypto watchdog, removing power from the SEC. The bill died in the Senate, though, lacking support for a companion bill required for it to become law.
Although much of the money for September's ad blitz went to Republican candidates like Moreno, Fairshake -- the largest of the three super PACs -- and its affiliates plowed millions of dollars into supporting Democratic candidates in key swing states as well.
Michigan Democratic Rep. Elissa Slotkin and Arizona Democratic Rep. Ruben Gallego each got almost $10 million in favorable ads from the pro-crypto super PACs for their Senate campaigns.
"We are proud of the progress we have seen toward the creation of a sustainable bipartisan coalition," a Fairshake spokesman said. "We will continue to execute this strategy through November and into the future."
Earlier in the year, the ad spending was targeted at knocking a handful of candidates out of primary races.
Fairshake deployed almost $10 million to campaign against California Senate candidate Katie Porter, a beloved figure among many liberals. The ad campaign claimed Porter took cash from "big banks, big pharma and big oil," an allegation she disputes.
Porter, who ultimately lost the primary, says she didn't have a clearly established position on crypto at the time. But she had signed a letter seeking information about how bitcoin mining in Texas may affect climate change, the stability of the energy grid and consumers.
"This is a new kind of special-interest influence because it was so nakedly about the money," Porter said of the super PACs. "I was just used to illustrate the power of their money."
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Vicky Ge Huang at vicky.huang@wsj.com
(END) Dow Jones Newswires
October 12, 2024 09:00 ET (13:00 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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