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The cryptocurrency industry took a victory lap Wednesday. Devotees of digital currencies had cause to celebrate: An ally in Donald Trump had taken the White House and a slew of pro-crypto congressional candidates won races that included at least two Senate seats.
Only two years after the spectacular collapse of frauds like Sam Bankman-Fried ushered in a “crypto winter” in Washington, the industry wielded a $200 million campaign bankroll to buy itself back into D.C.’s good graces.
Crypto-backed candidates were close to running the table in Senate races after the election of Republican Bernie Moreno in Ohio and Democrat Elissa Slotkin in Michigan. The election of Trump, who has promised to make America the world’s “crypto capital,” sent bitcoin prices soaring.
Only the undecided Arizona Senate race between Democrat Ruben Gallego and Republican Kari Lake left in doubt a total sweep in top-level races for favorites of the digital currency industry. The crypto candidate in that race, Gallego, was ahead in the count as Arizona continued to process the ballot on Wednesday.
“Those decisions are going to have consequences in terms of big crypto spending money for or against you.”
The near-total victory put members of Congress and potential candidates on notice that if you don’t take positions favored by the industry, crypto will come after you with millions, said Rick Claypool, research director at the progressive consumer advocacy group Public Citizen.
“Now, the message that Congress receives,” Claypool said, “is very much that how you vote on crypto-related policy, those decisions are going to have consequences in terms of big crypto spending money for or against you.”
Crypto skeptics like Claypool warned that the results of the spending could soon be felt and that ordinary Americans would need to hang onto their wallets.
“In all likelihood, crypto deregulation is coming,” said Claypool. “People are going to have to be really careful about what they’re doing with their money. It looks like a tragedy waiting to happen.”
The results capped an extraordinary election that marked a new era for campaign finance with Citizens United, the 2011 Supreme Court decision, coming to full fruition.
Since Citizens United, business interests have often funneled their money through “dark money” nonprofits. This year, however, the crypto industry was straightforward about its massive spending to boost supporters and blast opponents.
The industry raised more than $197 million and spent at least $133 million on federal races, according to campaign finance reports compiled by technology researcher and writer Molly White.
The money was split between Republican and Democratic candidates at the congressional level in the primaries, but heavy spending on Moreno in the race’s final weeks tipped the overall balance toward the GOP.
A Crypto Mandate?
Ohio Sen. Sherrod Brown’s defeat was a stinging loss for consumer advocates who had long found a vocal leader in the Senate Banking Committee chair. Moreno was a car dealer with little statewide profile but an enthusiastic blockchain booster, when the industry adopted him as its candidate.
Brian Armstrong, the CEO of leading cryptocurrency platform Coinbase, celebrated the industry’s wins on social media.
“Welcome to the new members of America’s most pro-crypto Congress ever… 219+ pro-crypto candidates and counting have now been elected to the House & Senate. Tonight the crypto voter has spoken decisively – across party lines and in key races across the country,” he wrote Wednesday.
Yet many ordinary Americans probably never realized crypto was on the ballot. The tens of millions of dollars the leading industry lobbying group, the Fairshake PAC, spent on Moreno and other candidates never mentioned crypto, instead seizing on issues like inflation and immigration.
“I don’t think it’s an endorsement by the voters of cryptocurrencies at all, because the millions they presented in ads to advance the crypto sector’s interest didn’t say a word about crypto,” Claypool said.
“The millions they presented in ads to advance the crypto sector’s interest didn’t say a word about crypto.”
Crypto already scored a major victory in the House of Representatives this year when it won bipartisan support for its top priority, a bill to shift oversight from the Securities and Exchange Commission to a regulator that is perceived as more industry-friendly, the understaffed Commodity Futures Trading Commission.
The industry’s victories in Senate races give it clear momentum when the new Congress takes office in January.
Even without immediate action in Congress, crypto could see its most aggressive regulator defanged. Trump could replace crypto foe Gary Gensler as the SEC chair, although he could not fire him from the commission outright.
Crypto investor Cameron Winklevoss celebrated the impending changeover on X.
“Imagine how much we are going to accomplish in the next 4 years,” he wrote, “now that the crypto industry won’t be hemorrhaging $ billions on legal fees fighting the SEC and instead investing this money into building the future of money. Amazing awaits.”
Editor’s Note: In September 2022, The Intercept received $500,000 from Sam Bankman-Fried’s foundation, Building a Stronger Future, as part of a $4 million grant to fund our pandemic prevention and biosafety coverage. That grant has been suspended. In keeping with our general practice, The Intercept disclosed the funding in subsequent reporting on Bankman-Fried’s political activities.