Paul Grewal, the chief legal officer at Coinbase, has denied allegations that the cryptocurrency exchange breached campaign financing regulations by contributing $25 million to a super political action committee (PAC) in May of this year.

In a report published on July 31, Molly White, a notable critic of cryptocurrency, asserted that Coinbase “appears” to have violated campaign finance laws by donating to the Fairshake crypto super PAC while negotiating a federal government contract.

On August 1, Grewal responded to these allegations in a post on X, arguing that Coinbase does not qualify as a federal contractor according to the “plain language” of Code of Federal Regulations 111.51.

Source: Paul Grewal

Grewal stated, “USMS isn’t paying us with appropriated funds — something it made clear in the public [request for proposal].”

“Whether intentional or not this is misinformation.”

Coinbase previously contributed $5 million to the Fairshake super PAC in November 2023, $15.5 million in December 2023, and $25 million on May 30, 2024.

White argued that considering Coinbase’s request for proposal issued on March 4, 2024, and a contract that concludes “no sooner” than June 30, 2025, alongside the $25 million donation on May 30, the contribution occurred “well within” the forbidden timeframe for donations.

White claims Coinbase’s donations fell within the prohibited time period. Source: Citation Needed

Related: Coinbase shares rise 3% as Q2 crypto trading doubles from last year

Dr. Craigh Holman, a government affairs lobbyist, informed White that it is “illegal for a federal contractor to make a campaign contribution to any federal committee, including a super PAC,” suggesting that filing a complaint with the FEC would be appropriate.

However, in a later comment on X, Grewal clarified that all funds related to the request for proposal were drawn from the Assets Forfeiture Fund, which is fed by proceeds from the sale of assets forfeited to the US Government under the Department of Justice’s jurisdiction.

The Fairshake Super PAC states on its website that its mission is to “provide blockchain innovators the ability to develop their networks under a clearer regulatory and legal framework.”

Importantly, the Fairshake crypto super PAC has raised over $202 million this year and includes many of the largest firms in the cryptocurrency sector as contributors, with Coinbase among them. It is currently recognized as the largest super PAC for the 2024 election.

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