Dem Touted Her Pro-Crypto Stance—Then Big Crypto Sent Her Campaign to the Moon

Photo Illustration by Luis G. Rendon/The Daily Beast/Getty/AP
Photo Illustration by Luis G. Rendon/The Daily Beast/Getty/AP

In the final days of a hard-fought Democratic primary for an open congressional seat in Texas, a wave of glowing TV ads began running in Dallas in support of state Rep. Julie Johnson, one of the top two candidates.

“Democrat Julie Johnson is a Texas trailblazer,” the ad’s narrator said, touting Johnson’s record on gun reform and abortion rights, her endorsements from leaders like Beto O’Rourke, and the possibility she could be the first openly gay member of Congress from the South.

The ad was paid for by Protect Progress—a super PAC funded by cryptocurrency industry figures—which spent nearly $1 million to air the spot this week ahead of the primary election on Tuesday, according to federal campaign finance records.

Crypto-Loving Lawyer Eyes Run Against Sen. Elizabeth Warren

The late investment could prove critical for Johnson, who is locked in a close battle for first place in the primary with Brian Williams, a prominent Dallas trauma surgeon.

But the super PAC’s move to boost Johnson was hardly a coincidence. It came after Johnson added language to her campaign website that signaled her support for cryptocurrency and her desire to pass legislation in Congress that would spur “crypto innovation.”

On Johnson’s “Issues” page on her website, there is now a section dedicated to “innovation,” much of which focuses on cryptocurrency.

“Blockchain technology and its applications are ushering in the next generation of the internet, allowing Americans to own their data, create wealth, and be stakeholders in the digital spaces of the future,” the page reads, in part. “Americans can benefit from crypto innovation. We must establish clear rules of the road for the crypto industry to build technology that benefits everyday Americans, while protecting consumers and ensuring equitable outcomes for all.”

“As a member of Congress, I will work to make sure the United States has regulatory frameworks in place that allow American values to define the future of the global financial system, while protecting consumers and ensuring no American is left behind,” it continues.

This language did not exist on Johnson’s campaign website before February, according to versions of the website available on the Internet Archive. Because those archives are limited, it’s unclear exactly when the section was added, or if it was added along with an entire set of other issue positions that also did not appear before February.

The basic circumstances are clear, however: Johnson added language regarding the politically powerful and active industry in the final stretch of a close election—and got a critical boost because of it.

In response to questions from The Daily Beast, Johnson campaign spokesperson Chelsea Roe said that “any campaign is a living structure.”

“We regularly update the website with new endorsements, pushback messaging, and issue positions,” she said, adding that they have had to respond to alleged “Trump-style disinformation” from Williams, her opponent. (Johnson’s camp has complained about Williams’ characterization of her legislative record on guns.)

Shady Crypto Cash Fueled Their Campaigns. Will They Keep It?

Elsewhere on her site, there’s even more obvious evidence that Johnson, who appears to have had no strong opinions on cryptocurrency before this month, wanted help from this specific special interest. While it is illegal for candidates and super PACs to coordinate directly, candidates can circumvent those rules by using their website issue pages to signal relevant positions.

But there’s a more controversial tactic that candidates sometimes use to communicate to super PACs what specific content they want to be used in their ads. On a page of their website, they will have text—contained in a red outline—that will include things the campaign says that “voters should know.”

Johnson uses the tactic, known as “redboxing,” on her site. There, her campaign outlines aspects of her biography and record they want highlighted in paid outside ads. Protect Progress made several of those points in their ad. Within the redbox is also Johnson’s campaign language on crypto—as clear an invitation as there can be for the industry to run ads supporting her.

Campaign finance watchdogs argue redboxing is bad for democracy and totally undermines the principle outlined in the Citizens United decision that campaigns and super PACs cannot legally coordinate. But the Federal Election Commission, which enforces these rules, has essentially let it slide.

Should Johnson prevail in the primary, it could send a powerful message to other candidates looking to get an edge in their own competitive races in 2024.

In December 2023, Fairshake—the super PAC that is the affiliated parent of Protect Progress—said it would “support leaders who support American crypto and blockchain innovation and responsible regulation in the forthcoming 2024 elections.”

Josh Vlasto, a spokesperson for Fairshake, told The Daily Beast in a statement that “we're supporting Julie because she is a gets-things-done legislator and she'll move the ball on responsible regulation to protect American consumers and keep American jobs at home where they belong.”

“Every day Congress fails to act is another day where crypto jobs and wealth move off-shore, and scammers and criminals can game the system,” Vlasto said.

In electoral politics today—if not in finance—there are few better bets than crypto. In 2022, immensely well-resourced super PACs funded with crypto cash spent lavishly to make potentially decisive impacts in several Democratic congressional primaries.

Protect Our Future PAC, funded by the disgraced FTX founder Sam Bankman-Fried and his associates, spent at least $1 million in TV ads to boost candidates in six different safe-seat Democratic primaries. Five of the candidates they backed won. Some were more vocal about cryptocurrency. Others had not touched the issue at all.

The Political Donations That Have the Feds Running Scared

The substance of the crypto policy on Johnson’s site raises further questions. Large segments of the language on Johnson’s website match, word for word, the language used on the website of another candidate—Evan Low, a progressive Democrat running for an open congressional seat based in Silicon Valley.

Low’s website includes the same wording on “blockchain technology” that is “ushering in the next generation of the internet” used in Johnson’s website.

Both candidates state the exact same promise, too—that they “will work to make sure the United States has regulatory frameworks in place that allow American values to define the future of the global financial system, while protecting everyday consumers and ensuring no American is left behind.”

Notably, both Johnson and Low also say “the United States must lead the development of crypto and blockchain technology in the 21st century, rather than countries like Russia and China.”

The Johnson campaign did not respond to an emailed question about where the campaign’s language on cryptocurrency was sourced. A spokesperson for Low didn’t respond to a request for comment.

Although the big-spending FTX contingent dramatically collapsed—with candidates left to grapple with having been supported by a convicted criminal—there are still powerful crypto interests that have made no secret of their plans to influence the 2024 elections.

In January, Axios reported that Fairshake and its two affiliates, Protect Progress and Defend American Jobs, had raised a combined $85 million to spend in 2024.

These PACs have already had a sizable imprint on other races. Fairshake has spent $7 million in ads targeting Rep. Katie Porter (D-CA), a crypto skeptic who is a top candidate for California’s open U.S. Senate seat, an election that will also be held on Tuesday.

Johnson is vying to succeed Rep. Colin Allred (D-TX), who is hoping to win his own primary election on Tuesday to challenge Sen. Ted Cruz (R-TX) in the November election. The district, based in northern and eastern Dallas, is safely Democratic; Allred won re-election in 2022 by more than 30 points.

There is not much ideological daylight between Johnson and her lead rival, Williams. Johnson has been the top fundraiser in the race and earned the endorsement of the Dallas Morning-News.

In a statement to The Daily Beast, Williams criticized the crypto PAC spending on behalf of his opponent and said the district’s voters should have questions about what Johnson will do in office because of this support.

“It’s disheartening to see corporate special interests dump $1 million at the last minute to buy an election for Julie Johnson,” he said. “This is exactly the type of politics I’m running to change.”

Read more at The Daily Beast.

Get the Daily Beast's biggest scoops and scandals delivered right to your inbox. Sign up now.

Stay informed and gain unlimited access to the Daily Beast's unmatched reporting. Subscribe now.