U.S-based digital currency exchange Coinbase is reportedly planning to terminate its Political Action Committee (PAC) which has never received or disbursed any funds during its existence.
PACs are organizations in the U.S that receive and donate funds to political campaigns and they represent labor, business and policy interests. Coinbase which is one of the major cryptocurrency exchanges in the world reportedly submitted a filing to the Federal Election Commission (FEC), revealing the plan to shut down its PAC. The filing did not disclose whether the crypto exchange’s decision to go down that road had anything to do with the PAC not receiving or donating any funds.
There are requirements to be met before a PAC is allowed to halt its operations
The FEC requires organizations to submit their termination reports if they wish to halt the operations of their PACs. Public filings indicate that Coinbase’s PAC only lasted 10 months after its launch in June last year. One of the representatives from the cryptocurrency exchange confirmed the filing to terminate the PAC but did not reveal whether the FEC issued the green light.
The FEC website states that a PAC is allowed to file for the closure of its operations if it does not receive or plan to receive donations or if it fails to make/does not plan to make expenditures. The FEC also requires committees to file regular disclosure reports until it accepts the termination filing.
“Committees shouldn’t stop filing just because they checked the ‘Termination Report’ box on their regular campaign finance disclosure form,” the FEC website notes.
Coinbase’s former policy officer Mike Lempres helmed the PAC from its launch in 2018 up until he left the exchange in the same year to join the Andreessen Horowitz venture capital firm. Brian Brooks was one of the candidates likely to lead Coinbase’s PAC after Lempres’ exit. Brooks joined Coinbase in September 2018 and became its chief legal officer.
PACs received heavy criticism after the Citizens United v. FEC Supreme Court Case in 2010. Some of them are viewed as an opportunity for union donors and corporates to influence election outcomes. PACs have been barred from directly coordinating with the campaigns that they side with.
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