The Crypto Revolution comes to Washington, with eye on regulatory reform

The cryptocurrency industry emerged as one of the biggest winners of the 2024 election, with 273 pro-crypto candidates winning U.S. House seats and 19 securing Senate positions, according to latest data compiled by Stand with Crypto tracker.

A crypto rally followed the Nov. 5 reelection of Donald Trump, who had pledged to turn the U.S. into the “crypto capital of the planet.” Bitcoin surged above $93,000 for the first time a week later, and other cryptocurrencies like ether, solana and especially dogecoin got a boost. Overall, the crypto industry saw the electoral results as a huge win that could push development of digital assets in the country.

“When I look at that map, what I see is a purple wave,” says Kara Calvert, head of U.S. policy at Coinbase, one of the major crypto exchanges and biggest donors in the latest election cycle. “The crypto advocates, the people who showed up at the ballot, are really going to demonstrate that crypto showed up in a big way.”

The election also marked the transformation of crypto from a fringe technology movement into Washington’s newest power broker, but this swift ascension is raising questions about the future of money in American democracy. 

Crypto corporations alone poured over $119 million into the 2024 elections — accounting for 44% of all corporate political spending, according to data compiled by nonprofit watchdog Public Citizen. Koch Industries, a traditional heavyweight among political donors, came in second.

Only fossil fuel companies have spent more since 2010, when the Supreme Court’s ruling in Citizens United v. Federal Election Commission opened the floodgates for corporate spending in elections, according to the data.

“Over those 14 years, these huge expenditures from the crypto corporations in just the 2024 cycle brought them up to being the second-most politically spending active sector,” noted Rick Claypool, the author of a Public Citizen report tracking corporate political influence.

In Ohio, cryptocurrency industry groups spent over $40 million to help Republican Bernie Moreno, a blockchain firm founder, defeat pro-regulation Democratic Sen. Sherrod Brown in the state’s Senate race.

In multiple states, super PACs funded by the crypto industry ran ads that had nothing to do with crypto, Politico reported. The momentum has led some to sound the alarm about the deep pockets playing an increasingly pivotal role in American politics.

“The crypto oligarchy is big right now, and it’s dangerous,” said former U.S. Sen. Claire McCaskill, a Democrat from Missouri, as she spoke on a Nov. 13 “Impolitic” podcast hosted by John Heilemann.

New chapter for crypto power players

For crypto advocates, the election has renewed optimism and created an opportunity for a more favorable regulatory environment.

“This has been an incredibly exciting three years where we have seen the crypto industry really lock arms again, from big business to small startups, and thinking about how crypto policy will shape not just this industry, but the future economy,” Calvert said.

“We’ve definitely turned the corner as an industry, the Congress we’ll be dealing with next year will be the most pro-crypto yet,” said Kristin Smith, CEO of the Blockchain Association. “Most politicians have learned that there’s no upside to being anti-crypto, and so I think there’s going to be a willingness to get something done.”

Analysts at venture capital firm Andreeseen Horowitz, one of the biggest crypto donors in the latest election cycle, are also upbeat about the industry’s future. 

“We’re very optimistic that the government will now foster innovation, accelerate progress and enable the crypto ecosystem to thrive in the U.S.,” Miles Jennings, Michele Korver and Brian Quintenz wrote in a joint post. “The future of crypto in the U.S. is bright — it’s the perfect time to build here, and we’re excited about the possibility for regulatory clarity to finally come.”

The industry’s policy agenda and wish list are substantial. Top priorities include replacing U.S. Securities and Exchange Commission Chairman Gary Gensler, a Biden nominee whom they view as hostile to digital assets, and passing the Financial Innovation and Technology for the 21st Century Act, or FIT21, bill to create a federal framework for regulations.

Candidates under consideration to lead the SEC include Daniel Gallagher, a former SEC official now at Robinhood, and current Republican SEC commissioners Hester Peirce and Mark Uyeda, according to the Washington Post. 

The crypto industry’s influence is likely to be felt in future elections. Coinbase and Andreeseen have contributed additional funding to Fairshake, a super PAC that funds pro-crypto candidates and has approximately $78 million to use in the 2026 midterms. Stand with Crypto, a group that currently has 1.9 million advocates across the country, aims to reach 4 million advocates by the midterms, according to figures cited by Coinbase’s CEO.

Oversight concerns

Crypto’s resurgence, just years after the scandals of FTX and other failed crypto exchanges, raises questions about who will keep crypto donors in check and consumers safe.

The industry’s influence stems largely from a handful of wealthy players — a concentration of power that mirrors the financial system crypto pioneers once railed against. 

“When you look at [Federal Election Commission] data, it’s a really small number of companies and individuals who comprise the majority of the donations,” said Mark Hays, a senior policy analyst at Americans for Financial Reform. Hays said crypto’s legislative agenda can sometimes amount to seeking exemptions from fundamental consumer protections. 

“I don’t think this is about an industry that tried to find regulatory common ground,” Hays said. “The industry has pushed back on most of the existing regulatory framework — anti-money laundering rules, tax reporting, even environmental emissions reporting.”

Crypto now faces a critical period to capitalize on its electoral momentum and secure meaningful regulatory reform, which will likely shape the future of digital assets in America.

“There is a real opportunity to work toward bipartisan legislation before the end of the year,” Calvert said. “The big question is, what can happen in [six] weeks? Can stablecoin legislation happen? Can market structure legislation happen? Can we make sure that the [Commodity Futures Trading Commission] gets the necessary authority to regulate spot markets?”

For industry leaders like Coinbase CEO Brian Armstrong, it’s a matter of survival. 

“What we won’t tolerate are politicians trying to unlawfully destroy our industry, or take the rights of our customers away,” he wrote in a Nov. 6 post on X in response to the election results.