The cryptocurrency world is celebrating a successful operation to oust its critics and usher in a new cohort of allies up and down the ballot just two years after several scandals roiled the industry’s status in Washington.
While the crypto industry walked a fine line as it made its pitch to both President-elect Trump and Vice President Harris, Trump’s victory delivers a big win for the crypto community as it gains prominence in Washington.
Trump’s embrace of crypto on the campaign trail marked a shift for the former president, who once dismissed digital currencies as a “scam.”
He has since vowed to make the United States the “crypto capital of the planet” and put an end to what he calls the “unlawful and unAmerican crypto crackdown.”
“I think in every economy what matters most on crypto is the tone from the top, and now you have the president-elect, who has a very ambitious and optimistic position on crypto,” cryptocurrency exchange Coinbase chief policy officer Faryar Shirzad told The Hill.
“He wants it built and developed in the United States, he wants America to be the leader in crypto, and I think that’s really encouraging.”
Coinbase was at the forefront of the industry’s political engagement this election cycle, with the company loading $70.5 million into the Fairshake super PAC, which also received $1 million from CEO Brian Armstrong, according to Federal Election Commission data.
The crypto exchange platform also helped launch Stand with Crypto, a 501(c)4 group that held rallies and concerts across the country in the lead up to the election.
Trump campaign senior adviser Brian Hughes told The Hill last week that crypto innovators and others in the community were “under attack from Kamala Harris and the Democrats.”
The Trump campaign repeatedly hammered at the Biden-Harris administration’s crypto-critical approach, notably including the leadership of Securities and Exchange Commission (SEC) Chair Gary Gensler, whom Trump pledged to fire if reelected.
“On the regulatory side, Trump’s win is huge,” said Owen Tedford, a senior research analyst at Beacon Policy Advisors. “At the SEC, no more Gensler. That is just a complete tone shift towards the industry.”
Shirzad suggested Trump understands Americans’ sentiment about the country’s current financial system.
“Trump as a candidate understood what surveys have shown for years and years, which [is] 90 percent of the American people across all demographics are disaffected by and don’t feel that the current financial system works for them,” he said. “And very large majorities of Americans see crypto as a viable alternative to that.”
In another apparent appeal to the crypto industry, Trump and his sons launched a new cryptocurrency platform in September called World Liberty Financial.
The emerging political power of crypto is a remarkable shift from two years ago, when the collapse of FTX and indictment of its founder threatened to derail the industry’s hold on Washington.
That power was on full display in Ohio, where pro-crypto super PACs spent tens of millions of dollars backing Republican businessman Bernie Moreno, who emerged victorious over Sen. Sherrod Brown (D-Ohio) in another massive victory for the industry.
The three largest pro-crypto super PACs poured nearly $133.2 million into media production and placement in some of the country’s most competitive races, according to the money-in-politics tracking nonprofit OpenSecrets. The super PACs — Fairshake, Defending American Jobs and Protect Progress — are not allowed to legally coordinate their spending with the campaigns.
Nearly one-third of that total — $40.1 million — toward boosting Moreno in his race against Brown, the chairman of the Senate Banking Committee dubbed “strongly against crypto” by Stand With Crypto.
Moreno, who built up a successful network of car dealerships in Ohio, positioned himself as a political “outsider” in the race, defeating Brown by nearly four points on Tuesday night, according to projections from Decision Desk HQ.
He was endorsed by Trump and touted a pro-crypto approach on the trail, pledging to “defend” digital currencies against crypto-critical regulators and policies of the SEC.
The stance offered a sharp contrast to Brown, who came under fire from the industry for his push to crack down on illicit crypto and opposition to a bill that would have clarified how federal agencies regulate cryptocurrencies.
Moreno “understands that crypto is an important part of America’s future,” Coinbase CEO and co-founder Brian Armstrong wrote on X shortly after the Ohio race was called. “Bernie and the crypto owners who helped secure this win understand how everyone can benefit from crypto and are willing to fight for it. Welcome to America’s most pro-crypto Congress ever.”
While Moreno’s win is notable, the ousting of Brown is almost more significant, Tedford said, calling the Banking chair a “roadblock” to achieving pro-crypto policy.
“I don’t know if Moreno is necessarily someone that I see becoming the next Lummis,” he said, in reference to Republican Sen. Cynthia Lummis (Wy.), who has pushed for a strategic bitcoin reserve. “But he’s a vote in favor, which is always positive to replace that with Brown in general.”
Moreno’s win also helped Republicans flip the Senate, which would prevent Brown from being replaced with another anti-crypto Democrat, said, Michael Terpin, the founder of crypto venture capital firm Transform Ventures, noted.
“It would have likely been a continuation of Joe Biden, [Sen.] Elizabeth Warren [D-Mass.],” he said. “This is a new day.”
Warren, who won reelection Tuesday, has repeatedly pushed regulators to take a tougher stance on cryptocurrency trading.
Crypto cash also contributed to the primary election downfalls of industry critics, including Reps. Cori Bush (D-Mo.) and Jamaal Bowman (D-N.Y.). Both progressive lawmakers voted against a bill favored by the crypto industry, the Financial Innovation and Technology for the 21st Century Act.
The House passed FIT21 last May, the first comprehensive crypto legislation to ever pass out of the chamber. The bill includes a measure to move oversight of the industry to the Commodity Futures Trading Commission (CTFC), which is much smaller and less funded than the SEC.
Bush and Bowman both voted against the bill, while several lawmakers who voted for the bill were boosted by the three pro-crypto PACs.
Several of those candidates were running in races rated a “toss up” by the Cook Political Report, including Reps. Yadira Caraveo (D-Colo.), Lori Chavez-Deremer (R-Ore.), Juan Ciscomani (R-Ariz.), Don Davis (D-N.C.), Mike Garcia (R-Calif.), Zach Nunn (R-Iowa), Mary Peltola (D-Alaska), Michelle Steel (R-Calif.) and David Valadao (R-Calif.).
Decision Desk HQ projected Wednesday that the GOP has more than a 94 percent chance at taking control of the House as outstanding races trickle in, likely teeing up for a Republican trifecta this election cycle.
How effective Congress is in taking up crypto policy remains unknown, though Tedford suggested the forecast will become clearer once the House majority party is determined.
This will impact who could take up the gavel after House Financial Services Committee Chair Patrick McHenry (R-N.C.), a crypto advocate, retires in January, Tedford said.
“What kind of emphasis do they put on crypto? Because there’s going to be a pretty full agenda next year if there’s the Republican trifecta,” he said. “And so where does crypto end up falling in?”
