By Andrea Shalal

WASHINGTON, June 5 (Reuters) - Stand with Crypto, an

advocacy organization for voters who own cryptocurrencies, saw

its membership surpass 1 million on Wednesday, as crypto backers

push politicians to create a new regulatory framework for the

digital asset industry while averting more onerous compliance

requirements.

Brian Armstrong, chief executive of Coinbase, an online

platform for buying and selling crypto that helped launch Stand

With Crypto last August, said the group's rapid growth showed

the potential voting power of cryptocurrency users.

"It's a much bigger voting bloc than most people probably

would have anticipated," Armstrong told Reuters.

The cryptocurrency industry is spending tens of millions of

dollars in U.S. elections this year to boost crypto-friendly

candidates and defeat those pushing for more regulation.

Coinbase on Monday announced a $25 million donation to the

pro-crypto political action committee Fairshake, matching recent

contributions from crypto payments company Ripple and

tech-focused venture capital firm Andreessen Horowitz.

Stand with Crypto has targeted voters in swing states and

now has nearly 24,000 members in Georgia, where Democratic

President Joe Biden beat Republican Donald Trump in 2020 by

11,779 votes, and over 16,000 members in Arizona, where Biden

won by just over 10,000 votes.

Armstrong said a surge in the group's membership was fueled

by frustration over Biden's May 31 veto of a measure that aimed

to overturn the Securities and Exchange Commission's accounting

bulletin on crypto assets, and by strong support for the

Republican-sponsored bill that would create a new legal

framework for digital currencies.

The Republican-led House of Representatives passed the

so-called Financial Innovation and Technology for the 21st

Century Act last month with bipartisan support although the

White House has said it opposes it. SEC Chair Gary Gensler has

warned the bill could create new risks for investors and

markets.

Coinbase officials have met with White House and Biden

administration officials over the past several months on the

issues, a source with the matter said.

Armstrong said he was not backing a presidential candidate

because he felt crypto issues should be bipartisan to ensure

passage of needed legislation.

But he said Biden's veto last week was clearly "a bad

political move" given broad bipartisan support for the measure.

"I think that it's just bad politics to be anti-crypto.

There's no voter constituency that you're winning over by doing

that, but you are upsetting a huge number of Americans who've

used this technology," he said.

Coinbase estimates that 52 million Americans have used

cryptocurrencies, representing roughly one in five Democrats,

Republicans or independent voters, Armstrong said. Many were

frustrated that the rules for the industry weren't clear.

"They're looking to elect representatives that are aligned

with their values," he said. He said it was unclear if people in

the rapidly growing "voter bloc" would cast their votes in the

November presidential election on the basis of digital asset

issues, but that a subset certainly could.

The White House and the Biden campaign declined to comment.

Biden's campaign has stepped up its outreach to the industry

and cryptocurrency users in recent weeks, a source familiar with

the matter said.

Trump's campaign announced last month that it would accept

donations in crypto. Biden's campaign had no immediate comment

on whether it was accepting such donations.