The crypto sector's substantial campaign finance efforts, totaling $169 million, have yielded rapid results in Washington. This investment has helped eliminate a powerful Democratic senator who previously hindered legislation and has introduced a large number of new, crypto-friendly faces to Congress. With Donald Trump's return to the White House, the industry may also gain an outspoken ally in the presidency, potentially leading to the removal of SEC Chair Gary Gensler. The loss of Sherrod Brown, the Democratic chairman of the Senate Banking Committee, has contributed to the Republicans' Senate majority, paving the way for a new, crypto-friendly GOP chairman.
The Senate has been a significant roadblock to crypto legislation, including the Financial Innovation and Technology for the 21st Century Act and the stablecoin bill, both of which have already passed the House. The Fairshake political action committee's efforts, backed by tens of millions of dollars, have led to the election of blockchain businessman Bernie Moreno, who will replace Brown.
The crypto industry's progress is expected to continue, with Congress likely to work on legislation that may override the views of the Securities and Exchange Commission and the Commodity Futures Trading Commission. If such legislation becomes law, the SEC and CFTC will be required to implement it, potentially redefining what constitutes a crypto security. Paul Grewal, Coinbase's chief legal officer, has urged the SEC to initiate rulemaking and engage with the crypto industry. The Fairshake spending has also helped elect a large number of new, crypto-friendly candidates to Congress, with over 30 of its 58 favored candidates winning their races.
The crypto industry's campaign financing has also supported current lawmakers who have worked on the industry's behalf, such as Tom Emmer and Ritchie Torres. With Trump's victory, the industry may see sudden and dramatic changes, including the potential replacement of Gensler as SEC chair.
Gensler has been a target of criticism from the crypto industry due to his 'regulation by enforcement' policy and antagonism towards industry participants. The SEC has sued numerous crypto companies, including Coinbase, Kraken, and Binance, and has sent a Wells Notice to gaming company Immutable. Despite the White House fight, the Senate's control by the party with crypto support in its platform has reduced the urgency for the crypto industry. With at least two dozen freshman, crypto-friendly representatives joining the House of Representatives in January, the number of crypto supporters on Capitol Hill is growing substantially.