The Crypto Nonprofit: When is a (c)(4) an action organization?

Last week, we told you about what’s becoming an annual call to do something about dark money in politics.  Its been annual at least since the rider was first enacted in an effort to solidify dark money holds on politics by preventing the IRS from defining when a (c)(4) is an action organization.  Thanks to reporting in The Hill, there is now a likely poster child for the need to repeal the rider. 

A pro-crypto nonprofit is launching an advertising blitz ahead of a key regulator’s anticipated appearance before a congressional committee next week.  Dozens of crypto company founders — including Coinbase CEO Brian Armstrong — will also head to Capitol Hill as part of the organization’s Stand With Crypto Day on Sept. 27. Coinbase, the biggest U.S.-based crypto exchange, helped launch the independent nonprofit Stand With Crypto in August to mobilize the cryptocurrency community in support of pro-crypto policies. Since its launch, Coinbase says the group has garnered tens of thousands of supporters. 

The group’s new campaign targets federal lawmakers and seeks to get pro-crypto constituents across the U.S. to raise their voices with Congress. The push focuses on nine “swing states”: Arizona, California, Georgia, Illinois, New Hampshire, Nevada, Ohio, Pennsylvania and Wisconsin. The primarily digital push urges constituents to call their lawmakers and request their support for the Financial Innovation and Technology for the 21st Century Act (FIT21 Act), a sweeping regulatory bill supported by several crypto industry advocates, including Coinbase.

From the sounds of it, Stand With Crypto is really just Coinbase’ captive social welfare organization.  As such, or even if its not Coinbase’s alone, it’s primary purpose can’t be lobbying and electioneering.  Coinbase, by the way, is involved in SEC enforcement activity at the moment and is itself investing multi-millions in a lobbying campaign to convince legislators to enact crypto favorable legislation.  Stand With Crypto’s website seems proof that the Crypts ain’t even halfway concerned about political prohibitions.  It’s whole push is grassroots lobbying, and it even has a page where it rates every representative and senator on how favorable those legislators are towards crypto. 

The Stand With Crypto Alliance, a 501(c)(4) nonprofit, champions for clear, common-sense regulations for the crypto industry. We’re mobilizing the 52 million crypto owners in the US – a demographic that is younger (60% Gen-Z and Millennials) and more diverse (41% identify as racial minorities) than the general US population – to unlock crypto’s innovation potential and foster greater economic freedom.

Enough is enough. It’s time for our policymakers to step up, embrace the future, and enact clear rules for crypto to thrive.  By Standing With Crypto you choose to support common sense legislation and elected officials that will:

• • Protect the right of Americans to choose to use crypto
  • Support common-sense legislation that fosters innovation and creates jobs while protecting consumers
  • Enable America to remain the leader in financial services for decades to come, rather than ceding ground to the 83% of G20 members and major financial hubs have made greater progress towards regulatory clarity. We can’t afford to get left behind.

Seem like a (c)(4) version of an action organization to me.  But we probably will never know, not as long as that rider still applies.  

darryll k. jones