Kraken Prepares for Crypto Challenges Amid US Economic Decline
Crypto firms are vying for political clout, and Kraken is making significant strides. Co-CEO Arjun Sethi announced on Wednesday that the exchange will invest $2 million in two pro-crypto political action committees.
Summary
- Kraken is demonstrating its commitment to political involvement by donating $2 million to pro-crypto PACs—the Freedom Fund and America First Digital.
- The exchange portrays this move as a stance for digital freedom, despite both PACs predominantly supporting Republican candidates and Trump.
- The contributions come amid a surge in the crypto market, which is up 45% since January. A recent Reuters/Ipsos poll reveals that many Americans feel the broader economy is off track under Trump.
Kraken plans to allocate $1 million to the Freedom Fund PAC and another $1 million to the America First Digital (A1stDigital) PAC.
According to the firm, such contributions are crucial for safeguarding “core individual rights in the digital era.”
“We are not supporting a party,” Sethi clarified, even though both PACs are closely aligned with the Republican Party and endorse President Donald Trump’s objectives.
“We are not supporting a party. We are supporting principles,” emphasized Kraken co-CEO Arjun Sethi, focusing on self-custody, decentralized systems, freedom from financial surveillance, and open infrastructure. “We will continue to defend the right to own, move, and innovate with crypto in the United States,” he added.
While commending recent Congressional developments, Sethi cautions that essential crypto freedoms remain under threat.
He highlights ongoing issues regarding regulatory overreach and constraints on privacy tools.
Crypto PACs raise $140 million for midterm elections
Recall that last October, the crypto sector dedicated $160 million to lobbying efforts.
This investment has yielded positive outcomes. Since Inauguration Day, the crypto industry has enjoyed more relaxed regulations and hosted at least two White House events. These included the March 2025 Digital Asset Summit, where major crypto stakeholders discussed a U.S. Strategic Bitcoin Reserve, and a May 2025 gathering for prominent holders of the TRUMP meme coin.
Both events underscored the engagement between the Trump administration and the crypto sector, raising ethical questions about potential conflicts of interest.
Kraken itself has directly benefited from pro-crypto regulatory actions, including the SEC dropping a lawsuit against the firm in March.
With the 2026 midterm elections approaching, the industry aims to solidify its gains by amplifying political spending.
To date, crypto PACs have amassed $140 million from key industry contributors. This financial backing will be used to support candidates who endorse a pro-crypto agenda, primarily those aligned with Republican views, bolstered by Trump himself.
It’s worth noting that one of the most significant pieces of pro-crypto legislation, the GENIUS Act, was a bipartisan effort. Introduced by Senator Bill Hagerty, the bill establishes a regulatory framework for payment stablecoins in the U.S. It passed both the Senate (68-30) and the House (308-122), receiving bipartisan support, and was signed into law by Trump on July 18.
Nevertheless, Kraken is seeking further advancements.
“The fight for crypto in the United States is far from over,” Sethi reiterated.
Kraken’s contributions come at a time when Trump’s approval rating has fallen to just 41%.
Approximately 54% of respondents in a Reuters/Ipsos survey believe the economy is on the wrong track, marking an increase from previous months.
Since January, the cryptocurrency market has experienced remarkable growth, with global market capitalization rising from about $2.76 trillion in April to over $4 trillion by September.
This translates to a roughly 45% increase over eight months.