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The US crypto industry is facing a difficult political choice ahead of the November midterm elections after the Senate rejected a major cryptocurrency market-structure bill. Crypto companies and political groups must now decide whether to target Democrats who opposed the legislation or preserve bipartisan relationships that could prove important if Democrats regain control of the Senate. The industry has spent more than USD 300 million during the 2024 and 2026 election cycles backing candidates from both parties in an effort to advance crypto-friendly legislation.
The setback came last month when Senate Democrats and four Republicans voted against advancing the Clarity Act, a bill the crypto industry had viewed as a key step toward establishing clearer rules for digital assets in the US.
The failed legislation has intensified tensions between crypto donors and some Democratic lawmakers. The debate was partly complicated by concerns over President Donald Trump’s personal crypto interests, with Democrats seeking stronger restrictions on crypto dealings involving government officials.
The industry now faces a strategic dilemma. Taking an aggressive approach against Democrats could satisfy donors seeking political retaliation, but it could also damage relationships with lawmakers who may influence future crypto legislation. That concern is particularly important since nine Democratic senators who are up for re-election have previously been viewed by the industry as potential allies.
Crypto-backed political groups are already putting money into the midterms. Fairshake, a major crypto super PAC backed by companies including Coinbase and Ripple, began 2026 with about USD 193 million and has spent money in 57 races during the current election cycle. It recently announced support for 32 House candidates from both parties.
The group is also spending heavily against former Ohio Senator Sherrod Brown, a Democrat who has been a longtime critic of the industry's political influence. Fairshake spent about USD 40 million helping defeat Brown in 2024 and is now backing efforts against his return to the Senate.
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Other crypto groups are taking a broader approach rather than abandoning Democratic allies. Stand With Crypto, a Coinbase-backed nonprofit, has endorsed candidates from both parties who supported the Clarity Act.
Industry executives say maintaining bipartisan relationships could be more valuable than turning the election into a punishment campaign. A Democratic Senate could gain committee control and greater oversight of crypto companies, making relationships with lawmakers such as Cory Booker and Mark Warner particularly significant.
For crypto donors, the immediate challenge is balancing political retaliation with long-term policy goals. With the midterms only weeks away, the industry's spending decisions could shape both individual races and its ability to influence future cryptocurrency legislation.
