The crypto industry is flexing its muscles in Washington in hopes of influencing the upcoming US election, spending unprecedented amounts to elect crypto-friendly candidates and educate lawmakers. All hope to eventually establish a crypto-friendly regulatory framework.
Crypto-focused political action committees (PACs) like FairShake, which has raised about $85 million from a collection of crypto companies, executives, and individual investors, have used more than 1,000 crypto-focused political action committees (PACs) to quash crypto bidding. He has been successful in shaping the outcome of several relevant races, including spending $1 million. -Critic Rep. Katie Porter (D-Calif.).
FairShake also funnels money to two affiliated PACs: Defend American Jobs, which donates to Republican candidates, and Protect Progress, which donates to Democratic candidates. Both donated to winning campaigns. Over the past two months, Defend American Jobs has spent nearly $500,000 on media buys for Republican Indiana Sen. Mark Messmer, who won the Republican nomination for Indiana's 8th District Congress this week.
Some of Protect Progress' crypto-friendly Democratic candidates, such as Shomali Figures, who is running for the House of Representatives in Alabama, and Julie Johnson of Texas, also entered their primaries with the help of media buys. has achieved victory.
“This is a level we haven't seen in past election cycles,” said Kristin Smith, CEO of the blockchain association, a cryptocurrency lobbying group.
Industry insiders say the industry's economic power has discouraged some crypto skeptics, including Sen. Sherrod Brown (D-Ohio), chairman of the Senate Banking Committee, who is up for re-election this year. Even people say they are becoming more open-minded. We are focusing our stance on cryptocurrencies to avoid facing well-funded opposition from the industry.
“Previously he was not a friend of cryptocurrencies, but recently [Brown] “He said he's open to considering a cryptocurrency bill,” said Kyle Briggen, financial policy director at the technology-focused Chamber of Progress. “I think he's aware of the money coming from industry groups.” We have common-sense cryptocurrency policies that don't just prop up and support the traditional financial ecosystem without allowing innovation. ”
Previous efforts by the industry to shape election outcomes at the national level have had little success, but in the case of former FTX CEO Sam Bankman Fried, who was a criminal, the crypto industry 's growing political influence now appears to be more sustainable.
“This is a more sophisticated operation,” Smith said. “I feel like when I was walking around Washington, people were saying, 'Oh, I'm Christine, I work in that little blockchain industry.' Now I'm like, 'Wow, this is a powerful In the cryptocurrency industry, it's like, “They're here to influence Washington, and they're pulling out all the tools to do that.''
Although the cryptocurrency industry has primarily focused its lobbying efforts on Congressional elections, the US presidential election will also have a major impact on cryptocurrency regulation.
Voters who own crypto tend to prefer Donald Trump as presidential candidate, according to at least one small poll commissioned by crypto investment firm Paradigm, while other polls show that voters who own crypto tend to prefer Donald Trump as presidential candidate. The percentage of voters who hold the same is said to be small. Polymarket bettors currently expect Trump to win narrowly (47% vs. 44% for Biden). But industry insiders are less certain whether Trump's presidency will actually be better for cryptocurrencies.
Although President Trump's stance on cryptocurrencies is changing, he remains significantly less friendly than his former rival for the Republican presidential nomination, Vivek Ramaswamy. Ramaswamy promised to create a clear regulatory structure for cryptocurrencies that protects crypto developers and considers most tokens as commodities. .
Lee Bratcher, founder and chairman of the Texas Blockchain Council, argued that Trump is looking to Vivec on technology and digital asset policy. “He didn't always do that, but when you look at how Vivec captured Republican voters and more centrist voters. [voters] He's probably more interested in that than President Trump being captured. [policy]. ”
Industry insiders are divided on whether Biden's re-election will have a negative impact on the crypto industry.
“It's probably going to be the same unless it is,” Smith said. [Securities and Exchange Commission Chair] “Gary Gensler has decided to resign,” which means continued regulatory uncertainty and aggressive enforcement action. He added that a better, more open-minded SEC chairman would be “very helpful.”
Smith said, “When the Biden administration first started, there was some interest in cryptocurrencies, but then, while we were reporting on everything, the crypto industry collapsed, and as a result, we are now in a clearly negative situation. Because there is,” he said. . “upon [Biden’s] Look, the industry has had its share of not-so-good times, and it's understandable that regulators are concerned. ”
Smith said that while the crypto industry is largely out of the crypto collapse of 2022, which included the implosion of FTX, Terra/LUNA, and Three Arrows Capital, regulators have a much longer memory.
“Having a new regulator come in would help restart the dialogue,” Smith said.
Some, like Briggen, are hopeful that if Biden remains in office, crypto-friendly legislation will be passed after the election.
“Even if President Biden is re-elected, it cannot be said to be a loss for crypto supporters, because right now in this administration, Democrats and Republicans are working together in a bipartisan manner to create a productive and responsible crypto This is because it produces [legislation]” Briggen said.
Efforts are underway in the current Congress to pass cryptocurrency legislation, including a bipartisan effort to regulate stablecoins.
These legislative efforts, which have failed to gain footing in the past, still have major hurdles to clear before they pass, including getting more lawmakers on board with cryptocurrencies.
Briggen said there are still many members of Congress who don't know much about cryptocurrencies, and what they do know about them is “cryptocurrency scams, people fake coins, people being scammed out of money,” Briggen said. “It's coming from flashy headlines about big cryptocurrencies and things like that.” “Financial institutions are failing and they look at it from a protectionist perspective,” he said.
“If we want to get more crypto-friendly people, we need every office to have a basic understanding of what cryptocurrencies are, why they matter to voters, and what the policy landscape is for regulating them.” We need to provide that understanding. We all need to do that,” Brigen said. “Without that basic information, our members will be left fumbling around trying to understand what blockchain technology is…We need a more concerted education effort. “In 2025, we have to make an effort.'' ”
Bratcher added that in addition to education efforts, the industry may need to compromise on certain issues, such as privacy, to make real progress with lawmakers.
“We're at an interesting crossroads when it comes to privacy,” Bratcher said, referring to the ongoing crackdown on Bitcoin-mixed services like Tornado Cash and Samourai Wallet.
“People in the digital asset industry want to prioritize privacy above all else. When we work with state, local, and national governments, and even law enforcement, we cannot afford to make exaggerated claims about it. No, Bratcher added: “There has to be a balance between privacy and money laundering and national security issues.”
“Tornado Cache is not a hill I would die trying to climb,” Bratcher said. “If you choose to die on Tornadocache Hill, you may lose the war.”
While the spotlight is on national elections, Bratcher and Dennis Porter, co-founder and CEO of the Bitcoin mining advocacy group Satoshi Action Fund, are focusing their efforts on national politics. There is.
Porter's group helped introduce legislation to protect Bitcoin mining and self-custody in 16 US states. Oklahoma is the furthest along with the bill, which has passed both the state House and Senate and is awaiting signature from Republican Gov. Kevin Stitt.
“D.C. is fun and sexy. There's a lot of money being spent there, but so far we haven't seen any big wins. All the important battles are happening at the state level,” Porter said. Ta.
Porter said the industry needs to continue to increase its presence in Washington, D.C., but there will be no magical cure for all ills on Capitol Hill.
“The way we do it is done at the state level,” Porter said. “We will use each state as a laboratory for democracy, advocate for digital asset promotion policies state by state, and ultimately take those good ideas and use them to influence policy at the federal level. Or at the very least, create a regulatory regime that protects people at the state level.”
Porter's cryptocurrency regulatory model takes a page out of the cannabis industry's playbook and builds momentum and support in each state until the industry has enough power to shape federal regulation.
“We've been swinging for home runs over and over again in Washington, D.C., and we're still not strong enough,” Porter said. “I think we're further away from that than we think…The key for me is we need to spend more time and invest more money at the state level. Because billions of dollars are being spent.'' DC spending at the state level would fundamentally reshape the policy landscape and fundamentally change the dynamics of Bitcoin and digital assets in America. It will change. ”
