Kyrsten Sinema Pivots to Crypto
Kyrsten Sinema accepted tens of thousands of dollars from crypto companies while in Congress. Now she’s leveraging those ties as a new adviser to Coinbase, the $73 billion crypto exchange platform.
Kyrsten Sinema speaks with reporters in the Capitol Building on December 20, 2023, in Washington, DC. (Anna Moneymaker / Getty Images)
On Wednesday, former Arizona senator Kyrsten Sinema announced her first post-congressional plans: serving as an adviser to Coinbase, a $73 billion cryptocurrency exchange platform. The move comes after Sinema took nearly $10,000 from the company and tens of thousands more from other crypto interests, all while pushing bills to limit oversight of the volatile, largely unregulated industry.
While still in office in September 2024, Sinema appeared at a public event sponsored by Coinbase, telling a crowd that “it’s important that we use this election cycle to ensure that the crypto community’s voice is heard.”
Now that she’s out of a job as a lawmaker after announcing she would not run again in 2024, Sinema has turned her support for the industry into her next gig. She will join Coinbase’s Global Advisory Council alongside former Trump campaign manager Chris LaCivita, who stewarded President Donald Trump’s pro-crypto 2024 platform.
Trump went all in on crypto during his 2024 campaign, embracing the “first crypto president” moniker and promising to create a national crypto stockpile and instate crypto-friendly leadership. He has already started to make good on those promises — to the delight of crypto companies like Coinbase.
Federal regulators and advocates have warned that such an open embrace of the crypto industry — which is prone to crashes and increasingly intertwined with traditional markets — could lead to widespread financial harms far beyond just the interests of crypto enthusiasts. Yet Sinema and other crypto-friendly lawmakers have paid little mind to such warnings.
Jeff Hauser, the executive director of the Revolving Door Project, a watchdog group focused on corporate influence in Washington, said Sinema’s new gig was a reminder that “it has never been possible to be too cynical about the lack of principles of either Sinema or the crypto industry.”
“Coinbase is paying Sinema to convert her time in public service into political influence for the crypto industry generally and Coinbase in particular,” he told the Lever.
Coinbase, which spent nearly $4 million lobbying lawmakers in Washington last year, has already built an advisory council full of former lawmakers, including three former US representatives and a former senator. In its press release announcing Sinema’s role, the company heralded “the dawn of a new era for American leadership on crypto” and said the council, which advises company leadership, would help navigate “new political and regulatory realities” in Washington.
“The Best Target for Crypto”
Upon taking office in 2019 and for much of her first two years in Congress, Sinema said little about cryptocurrency. The industry did yet not rank among her top donors. This began to change in 2021, when Sinema joined the inaugural Financial Innovation Caucus, a House caucus focusing on financial technology, including crypto.
At the time, the crypto lobby did not yet wield the kind of political influence that it displayed this past election cycle. But as the industry expanded rapidly, policymakers mounted a growing effort to regulate cryptocurrencies. As they did so, crypto companies began to woo lawmakers.
That August, crypto companies launched an unexpected lobbying blitz over new cryptocurrency reporting requirements in former president Joe Biden’s bipartisan infrastructure bill. That included donating $180,000 to Sinema that quarter, much of which came from the tech firm of entrepreneur and Trump ally Marc Andreessen, which invests in crypto.
Sinema, who had originally supported the reporting requirements, quickly backtracked and instead tried to broker a deal between crypto interests and lawmakers. (Ultimately, the reporting mandates fell through altogether.)
Sinema, who caucused with the Democrats until switching her affiliation to Independent in December 2022, was an important target for crypto lobbyists under the Biden administration, said Hauser. Some Democrats, concerned about the market’s volatility and its potential for fraud, were at the time starting to consider a crackdown.
“Given that the Republican Party is all in on crypto, crypto’s only political threat in recent years was from the potential of a united Democratic Party willing to crack down on the preferred funding mechanism for ransomware and international money laundering,” he said.
Sinema, who had a track record of doing the bidding of corporate lobbyists, was “obviously the best target for crypto, like any corporate interest, looking to buy off a key Democrat,” Hauser added.
Since her 2021 about-face, Sinema has remained a top recipient of crypto industry cash, according to data compiled by OpenSecrets, ranking fourth in the Senate and seventh overall in Congress for total crypto money received. She also has taken significant sums from Coinbase, which she is now advising: in 2023, she received $9,900 total from company’s CEO Brian Armstrong and its former vice president of engineering.
Sinema granted the industry favors during this time. In 2022, Sinema introduced a bill alongside former senator Pat Toomey (R-PA) that would have exempted some crypto transactions from capital gains tax, which is levied on investment profits. Toomey, who retired in 2023, has also since joined the Coinbase Global Advisory Council.
The bill stalled, but Sinema cosponsored another, even broader version of the tax loophole in the last congressional session.
Last year, Sinema was among a group of eleven Democrats who broke with Biden and aligned themselves with crypto executives to oppose a new federal accounting measure requiring companies to count their digital currency assets as liabilities. Proponents of the guidance said it helped safeguard investors and consumers from frequent crypto market crashes, but because it increased the cost of holding crypto assets, crypto companies vehemently opposed the move.
Biden protected the rule, but the Trump Securities and Exchange Commission has now revoked it.
Sinema has also made public appearances in support of crypto — most memorably appearing at the Arizona stop of the “American Loves Crypto Tour,” a series of events in swing states organized by Coinbase’s lobbying arm Stand With Crypto.
At the September 2024 Arizona event, Sinema stood on a stage in front of a giant LED light display reading “Arizona Loves Crypto.” “You all understand the value of taking risks,” Sinema told the crowd. “The crypto industry wouldn’t exist if it weren’t for risk-taking.”
She added, “Don’t be afraid to support a candidate or an elected official who takes risks.”