Democratic sweep of Congress forces crypto industry to rethink Washington strategy

After two years of a pro-crypto, pro-innovation climate in Washington, the digital asset industry faces a sharp political jolt as Democrats take control of both chambers of Congress, forcing the sector to seek new allies within a party that has been more divided on crypto.

As results rolled in on Tuesday, crypto advocacy group Stand With Crypto said 19 pro-crypto lawmakers in the Senate had been elected and 226 in the House as Democrats took control of the House and Senate. Eight anti-crypto Senators were also elected alongside 106 in the House.

Following the results, some in the crypto industry have taken the position that crypto is bipartisan and that lawmakers on both sides of the aisle are pro-digital assets. But a Democratic sweep means more oversight, and there is close to no chance of the crypto industry getting legislation it wants on the table.

"Nobody has their head in the sand," said Kara Calvert, vice president of U.S. policy at Coinbase, in a post on X. "There will be headwinds for any bipartisan legislation next year, but crypto is 100% bipartisan."

Many of the new members in Congress are pro-crypto, said Kevin Wysocki, head of policy at Anchorage Digital.

"The younger members are more used to this technology, are more open to new technology that maybe rivals some of the existing technology," he said in an interview with The Block on Wednesday. "It's very bullish, I think, for crypto overall, so I think that's one of the great things from what happened yesterday, and I think it's only going to get better over time, regardless of who's in power, Republicans or Democrats."

However, one of the biggest races the crypto industry had its eyes on, and money on, was the Ohio Senate race between former Democratic Sen. Sherrod Brown and SWC-endorsed Republican Sen. Jon Husted. The crypto political action committee spent tens of millions of dollars on that race against Brown, but ultimately lost when Brown defeated Husted later in the night.

Brown was previously Senate Banking Committee Chair, which has jurisdiction over digital assets and has been viewed as critical of crypto. He could have a leading role in oversight and regulation of the industry. And since he won in a special election to fill Vice President JD Vance's Senate term, that means Brown could return to the Senate as early as Dec. 15.

Brown's return is significant, Wysocki said. When he was chair of the Senate Banking Committee, Brown and his Senate staff were open to constructive conversations about crypto, he said.

Crypto PAC money

Pro-crypto political action committees reportedly spent over $60 million alone in the Senate race in Ohio against Brown. On its own, crypto PAC Fairshake raised $106.2 million, according to Americans for Financial Reform. And crypto PACs overall spent $170 million on the midterms, according to Fortune, with millions going to Republican Sen. Pete Ricketts in Nebraska.

Fairshake spent $154.5 million in both primaries and the general election, with over $13.5 million going to Ricketts.

"Fairshake played a meaningful role in winning competitive races across the country in 2026 and we will do it again in 2028," said Geoff Vetter, spokesperson for Fairshake, in an emailed statement to The Block. "Newly elected and current members will have a choice: protect consumers and American jobs or fight progress. We will be watching and '28 is a new map."

One crypto industry source alluded that PACs and trade associations will have to "recalibrate" and need to "double down on being bipartisan."

Specifically on Fairshake, the person criticized funds being used on Brown's race.

"What did we ultimately get out of that?" they said. "Where could that money have been better spent? To be perfectly honest with you, I think it could have been better spent on shoe-leather lobbying."

That money could have been spent to lobby lawmakers on the Clarity Act, broad crypto legislation that passed the House, but got stuck in the Senate in September, they said.

"You spend a fraction of it, and you could have effectively hired all of DC to lobby on Clarity," they added.

Next on the agenda

Focus will turn to taxes and security and hacks, Anchorage's Wysocki said. The election, too, comes just days after the largest crypto hack on record of Binance for over $6 billion.

"Congress is going to be asking those questions, like how do we make security at our financial institutions stronger?" Wysocki said.

The Clarity Act that passed out of the House last year and stalled in the Senate a few months ago is unlikely to advance over the next two years given Brown's win, said investment bank TD Cowen.

Oversight will also come into view, including investigations into Trump-family-run World Liberty Financial, said TD Cowen’s Washington Research Group, led by managing director Jaret Seiberg.

"Democrats will investigate Trump's crypto entanglements, including World Liberty Financial," Seiberg wrote in a note on Wednesday. "We believe the resulting political environment may make it impossible to advance a version of Clarity that the crypto sector could back."