A newly formed crypto-focused super PAC, Fellowship, has made its inaugural ad buy, spending $300,000 with Nxum Group, a firm co-founded by Bo Hines, who serves as the chief executive of Tether's US operations and previously advised President Donald Trump. The Fellowship PAC, which has ties to Tether, has presented itself as a crypto campaign-finance powerhouse, albeit one that has only recently begun to participate in the US midterm elections.
The PAC's first expenditure was disclosed in a federal filing, which revealed that the payment was made to Nxum Group for advertising services on behalf of Georgia Republican Clay Fuller. The move has raised questions about potential self-dealing, given Hines' connection to both Tether and Nxum Group. According to Michael Beckel, an expert at the political reform organization Issue One, while there is no blanket prohibition on self-dealing in political committees, services must be provided at fair market value. The Fellowship PAC's advertising effort on behalf of Fuller is not yet clear, but the payment was made as Fuller was winning his special election.
Despite an initial announcement that the PAC would be established with $100 million in pledges, its current accounts show no contributions, sparking speculation about the source of its funding. An outside spokesperson for Tether maintained that Tether International has no affiliation or oversight over the Fellowship PAC, while deflecting further inquiries to the PAC itself, which has not responded to questions. The Fellowship PAC has begun to endorse Republican politicians seeking House and Senate seats, as well as a gubernatorial candidate in South Carolina, stating that it will support advocates of emerging digital assets technology.
The PAC's first financial backing went to Fuller, an incoming Republican member of the House of Representatives, who will require campaign support for the upcoming primary and general election. The money spent by the Fellowship super PAC was an independent expenditure, meaning it had to be handled without strategizing with Fuller's campaign.
As a candidate, Fuller has not publicly stated his position on crypto, but he has the backing of Trump, who has endorsed him as 'a wonderful and talented man.' The firm paid by the Fellowship PAC, Nxum Group, was co-founded by Bo Hines, who later became a leading adviser to Trump on crypto legislative advances. It is unclear whether Hines still has financial ties to Nxum. The PAC's treasurer, Mitchell Nobel, is an executive at Cantor Fitzgerald, a firm that manages assets for Tether's global operation.
When the Fellowship PAC was announced, it was presented as a contrast to previous political engagement efforts, aiming to help the broader crypto ecosystem and not 'narrow or individual interests.' The PAC's disclosures do not yet demonstrate a significant stockpile of contributions to back other candidates, but it is possible that some or all of the promised $100 million is already in the PAC's coffers. The relatively young Tether US's stablecoin, USAT, has a market cap of about $37 million, suggesting that the firm may not have the independent resources yet to fund a major PAC. According to Beckel, 'those types of super PAC threats are paper tigers that never materialize,' but lawmakers are taking notice of massive spending by industries. The rival Fairshake crypto super PAC has expended millions in early contests, and the US midterm elections are already underway.
If the US House is taken over by a Democratic majority, the committees there will likely shift their agenda to challenge Trump's legislative efforts and investigate the administration's actions. The crypto industry may need friends from both parties, and it's not too late for the Fellowship PAC to make a splash in the congressional field.