• Guest post by Jake Donoghue

As campaign efforts ramp up ahead of November’s Presidential election, cryptocurrency firms have been deploying an arsenal of dirty tricks, funded by a nine-figure war chest, to stack Congress with candidates willing to toe the line and to ensure crypto gets as much airtime as possible in the public square.

Earlier this month, crypto skeptic Molly White launched a website – followthecrypto.org – providing real-time data of crypto election campaign financing. It shows that, to date, the cryptocurrency sector has raised more than $187 million for the ironically named “Fairshake” super PAC and its affiliates. 

These committees have wasted no time putting these funds to use, with their notable outgoings including a successful $10 million smear campaign against progressive Democrat Katie Porter to keep her out of the Senate. 

Coinbase, the largest US crypto exchange, is the biggest contributor to Fairshake’s war chest, with $46.5 million in donations. They’re also leading the lobbying charge on another front: In 2023, the industry behemoth hired market research firm Morning Consult to find out how many Americans own cryptocurrencies. As soon as the results came in, Coinbase sprang into action, launching a major campaign to “mobilize 52 million crypto owners into an army of one million advocates for change.” 

This spurious and misleading figure – which equates to 20% of the nation’s entire adult population – is at stark variance with data from the US Federal Reserve. Specifically, the Fed’s Economic Well-Being of US Households survey. 

Published in May, the Fed’s report not only showed the percentage of US crypto holders to be far lower than that cited by Coinbase – 7% of the population, nearly two-thirds less than Morning Consult’s findings – but also that the number of holders is actually in decline, having fallen by 5% from 2021.

The inconsistency in these results was stark enough to elicit one of the world’s leading statisticians to wade into the debate – the first expert in the field of statistics to do so – and delve into Coinbase’s methodologies more closely. 

David Marker is a fellow of the American Statistical Association and American Academy for the Advancement of Science, and an elected member of the International Statistical Institute. Throughout a career spanning four decades, he has established his own consulting firm – Marker Consulting LLC – and has advised over half a dozen governments on improving the quality of their data collection and statistics. 

In a Zoom interview, Marker shared his opinion on Coinbase’s survey: 

This survey has not provided enough information to refute claims of it being low quality and spurious. [Morning Consult] hasn’t presented evidence to make you feel comfortable… with a survey which was funded by an organization which would like and benefit from these results.

Online surveys into crypto ownership can skew or misrepresent true figures, and they’re inherently limited, as they don’t factor in the digitally excluded on a topic that is directly related to digital comfort.

Morning Consult absolutely should have included a section in their report outlining the limitations of their survey and its methodologies.

Marker then went on to highlight a potentially nullifying aspect of the survey: its sampling. 

To obtain the headline-grabbing results of its survey, Morning Consult sampled 2,202 U.S. adults and also included an oversample of 500 people already known to hold crypto. 

Marker explained the problem with this: “It was not clear whether the oversample of known crypto holders was included in the general population sample. Being generous I read them as separate samples, but it wasn’t clear.”

He further explained that if the oversample was not separate, the entire survey would be invalidated, as the sample would not be random or representative of the population. 

I emailed Morning Consult asking if the samples were mixed. They never responded.

Morning Consult’s crypto survey doesn’t exist in isolation. It’s just one source among many that crypto proponents have been citing in discussions around the upcoming election to highlight the supposed significance of their industry. And, compared to the figures thrown up by other crypto-backed polls, its results seem modest. 

In June, Security.org, a site that reviews property and cybersecurity products, released the findings of a poll it conducted, which claimed to show as much as 40% of the American population owns crypto. In absolute terms, this equates to no less than 93 million people.  

Marker’s outlook on Security.org’s poll is even more scathing than his indignation towards the Morning Consult survey: 

It states that it’s been weighted for age, gender and ethnic background. That means that things like income, or anything about internet usage, were not controlled for. This is particularly problematic when we’re talking about something like crypto or investments.

He continued: 

This survey shows a 10% jump [in crypto ownership] in one year. You’d better have some good ways to make people feel comfortable that that really happened, and that it’s really worth believing. And based on the limited documentation they’ve provided, I don’t feel that assurance.

In a June interview with crypto media outlet The Block, the founder of asset management firm SkyBridge Capital Anthony Scaramucci – who became an international figure of ridicule in 2017 after serving as Trump’s director of communications for 11 days before being fired – cited Security.org’ polling figure (albeit erroneously attributing its origin to Coinbase): 

If there are 93 million crypto owners, and don’t go by me. We can Google that number. Coinbase has that number. Let’s say 1 % of them are ardent one-issue voters. That’s 930,000 votes…and if several hundred thousand of those are in the three or four [swing] states, Georgia, Arizona, and they could influence, impact, or change the election, then think it’s something people should be focused on.

Despite these surveys not being worth the server space they’re hosted on, that hasn’t stopped them being cited by politicians at the highest levels. 

Election hopefuls, keen to keep crypto funds flowing into their campaign coffers, have proven remarkably willing to spout the lines given to them by the crypto lobby, even if that means backtracking on previously staunch crypto skepticism. And the most high-profile of these stooges is none other than former President Trump himself. 

Throughout his presidency Trump railed against digital assets, describing himself as “not a fan of bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” and asserting that bitcoin “just seems like a scam.” However, in a speech delivered at a Libertarian Party convention in May this year, his change of tune was unequivocal: 

And I will also stop Joe Biden’s crusade to crush crypto. We’re gonna stop it. I will ensure that the future of bitcoin and the future of crypto will be made in the USA, not driven overseas. I will support the right to self-custody. To the nation’s 50 million crypto holders I say this: with your vote, I will keep Elizabeth Warren and her goons away from your bitcoin.

Since then, Trump has spent a lot of time rubbing shoulders with crypto luminaries. In June he hosted a working group of top industry executives and bitcoin miners at Mar-a-Lago, with one of the roundtable’s organizers, Bitcoin Magazine CEO David Bailey, who told CNBC: “As an industry we are committed to raising over $100 million and turning out more than 5,000,000 voters for the Trump re-election effort.” 

Trump’s love-in with the crypto industry shows no signs of cooling. Earlier this month, he was announced as keynote speaker at the industry’s flagship bitcoin conference in Nashville on July 25. An appointment he reportedly plans to keep, which will make it one of his first public appearances following his assassination attempt on July 13 – such is his newfound commitment to the crypto cause, and the big money behind it. 

As significant as this all is, the influence which Fairshake and its donors have bought for themselves has started to extend beyond the realm of mere discourse. Last week, in a seminal moment for the reputationally beleaguered crypto industry, the Republican National Committee officially adopted a policy platform championing digital assets and the rights of crypto holders. With wording that echoes Trump’s recent speech, the GOP’s platform promises they will “end Democrats’ unlawful and unAmerican crypto crackdown,” and “defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their digital assets.”

For a crypto lobby composed of firms keen to couch their political meddling as altruism undertaken for the benefit of the whole industry, and not just the oligarchy at its helm, this policy pledge was a major coup. It just goes to show what a $187 million super PAC can buy. 

As for the surveys, like so much in the crypto industry, a space in which illicit practices like wash trading and market manipulation are rife, they present nothing more than a facade of adoption and popularity. However, in an election as fiercely contested as this one, in which every dollar counts, these surveys give politicians all the justification they need to take the crypto bros’ money, in exchange for letting the scandal-plagued industry off its leash. 

It is a situation that risks deteriorating into a race to the bottom, with the end result being an industry that spawned the likes of FTX founder Sam Bankman-Fried and Terraform Labs cofounder Do Kwon, both now in jail, being given excessive room to run. It is corruption at its finest, whereby fraudsters and scammers are buying political influence in the hope that their scams and frauds will be legitimized and potentially even legalized further down the line. 

The fact that an industry such as crypto, built on ponzi schemes and useless tech, is allowed to wield any political influence is a major cause for concern, and something that should not go unchecked and unchallenged. 

Jake Donoghue is the author of “Crypto Confidential: An Insider’s Account from the Frontlines of Fraud.” [Amazon, UK; History Press, UK]