The cryptocurrency industry is at a political crossroads.
Reeling from the demise of its longtime top legislative priority, crypto companies must now decide how scorched-earth to go against Senate Democrats, who last week voted unanimously against the so-called Clarity Act, a sweeping bill that would create a bespoke new regulatory framework for digital assets.
A crypto-backed PAC network’s move this week provides a hint of what may be to come. The group, known as Fairshake, announced it would spend at least $30 million to help block Democrat Sherrod Brown from recapturing a pivotal Ohio Senate seat, representing the first major signal of how the industry plans to deploy its massive campaign war chest in the final weeks before the 2026 midterms.
Some crypto executives have publicly signaled an appetite in recent days for punishing Democrats. But a partisan strategy carries major political risk for the industry: A broad offensive against Democrats ahead of an election where they have a chance to reclaim power on Capitol Hill could further alienate lawmakers the industry may soon need to revive its agenda.
“As much as some people may want to, they can’t wave a wand and make Democrats go away,” said Sheila Warren, the former CEO of the Crypto Council for Innovation, an industry trade group. “Every industry — not just crypto — has to figure out what to do with that reality.”
The crypto industry’s spending could have immediate consequences after the election. Democrats are signaling that a Senate GOP-aligned spending spree would suppress any appetite for lame duck dealmaking involving the Clarity bill — although it remains a long shot that it would come back to life regardless. A Senate Democratic aide involved in the crypto effort said a full-scale assault on the party’s Senate candidates “would absolutely eviscerate any hope” of a post-election deal.
The Fairshake PAC group, funded primarily by crypto firms Coinbase and Ripple and venture capital giant Andreessen Horowitz, had more than $120 million at its disposal as of the end of August. It has previously deployed its war chest to help members of both parties who support industry-friendly policies.
Fairshake is preparing to announce additional spending decisions supporting both Democrats and Republicans in the coming days, according to a spokesperson for the group, Geoff Vetter. But it’s unclear what races — or which chamber — it will target next.
Kara Calvert, Coinbase’s vice president of U.S. policy, said in an interview that bipartisanship has been crypto’s “superpower.”
“Nobody is eager to erode that,” she said.
Though Fairshake says it will maintain a bipartisan approach, it hasn’t specified what shape that will take. One potential avenue for the PAC is to continue to back crypto-friendly Democrats running for the House — where the Clarity bill advanced with 78 Democratic votes last year — but primarily help Republicans in the Senate.
Fairshake spent in favor of several Senate Democrats in the 2024 elections, including in battleground general election races in Michigan and Arizona, where it backed Democratic Sens. Elissa Slotkin and Ruben Gallego, respectively. It also plowed more than $40 million into the effort to help defeat Brown in his 2024 reelection campaign — by far its biggest spend of the cycle.
This time, Republicans are pressing the industry to recalibrate its approach and ditch the Democrats.
“To reward people who voted against the motion to proceed on Clarity after the Democrats got 126 amendments in the bill would be a huge mistake,” said Sen. Cynthia Lummis, the crypto bill’s leading champion in the Senate. The Wyoming Republican is retiring when her term ends in January.
Democrats, who feel increasingly confident about their chances in November despite the GOP’s spending advantages, say Republicans are trying to play the crypto industry.
It’s “been the goal of Republican colleagues all along to try to get folks to invest in races, versus them trying to get a piece of legislation done, and someone needs to call the Republicans out on their bullshit,” said Sen. Ben Ray Luján (D-N.M.), who added: “Sherrod’s gonna win.”