A split among Democrats over how best to regulate the emerging cryptocurrency industry is leading to hundreds of millions in spending by the lobby in this year’s elections and causing fractures within the party.
Fairshake, the leading crypto-aligned PAC, had nearly $200 million cash on hand heading into the 2026 election cycle, eclipsing the $130 million spent by the industry ahead of November 2024. The money, though, is raising concerns that industry will wield too much influence over Democrats as they negotiate legislation to oversee the industry.
“Of course it has,” Sen. Elizabeth Warren (D-Massachusetts), the top Democrat on the Senate Banking committee, said when asked if the lobby has impacted Democratic support for the CLARITY Act.
The bill is intended to establish a regulatory framework for cryptocurrencies and advanced out of the Senate Banking committee in May with help from two Democrats –– Sens. Angela Alsobrooks (D-Maryland) and Ruben Gallego (D-Arizona). All Republicans on the committee backed the bill.
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Fairshake told NOTUS in a statement that lawmakers across the political spectrum have been working on drawing a responsible framework for the crypto industry, “rather than continuing with the unregulated status quo.”
“That should be a policy every member of good will favors,” Geoff Vetter, a spokesperson for Fairshake, said. “Unfortunately, some entrenched DC politicians would rather fight change than meet it.”
Gallego, who is rumored to be mulling a 2028 bid for president, received about $10 million from Protect Progress and other super PACs affiliated with major crypto platforms like Coinbase during his 2024 campaign. And Alsobrooks first spoke about the industry after crypto groups got involved in her own race in 2024.
Progressives like Warren are worried that the crypto industry could begin to more heavily influence Democratic primaries –– and the party’s position –– as it bolsters its spending.
“The crypto industry thinks that if they pour enough money in, they can buy the legislation that they want,” Warren said. “I have argued for a long time now that the Democratic Party should tell outside money to stay out of our primaries.”
This year, Fairshake-affiliated PACs spent nearly $10 million to boost industry-friendly Rep. Raja Krishnamoorthi, who lost his bid for Senate in Illinois, and nearly $5 million for Adrian Boafo, who won a competitive primary for a House seat in Maryland.
Sen. Chris Van Hollen (D-Maryland) also spoke out against the influence of crypto money, including in Boafo’s House race. Van Hollen told NOTUS that he has deep concerns about the potential for well-financed crypto groups to reshape which Democrats are elected to Congress.
“I think voters need to ask themselves why the crypto industry … is spending so heavily,” Van Hollen said.
Gallego did not respond to multiple requests for comment from NOTUS. Alsobrooks said she is working on the legislation because the “technology is already here.”
“It’s Congress’ responsibility to regulate these digital assets and protect consumers,” Alsobrooks said in a statement to NOTUS. “To ignore it or to refuse to negotiate would be to neglect our responsibility to our constituents.”
Spending by crypto-aligned groups is also booming in Republican primaries. Fairshake has put nearly $7 million behind Rep. Andy Barr in his bid for a Kentucky Senate seat and financed Jessica Steinmann and Trever Nehls’ bids for Congress in Texas.
But spending in those races has primarily propped up already pro-crypto Republicans, while experts said financing in Democratic primaries has helped shape a new wave of industry-friendly candidates.
“Crypto has a tremendous amount of money behind it, and they’ve shown a willingness to back a wide degree, a wide ideological span of candidates, as long as they’re quote, unquote pro quid crypto. So there’s the actual money they have to deploy, and then the threat of money being deployed against you,” said Aaron Klein, a fellow at the Brookings Institution.
Alsobrooks and Gallego have said that Democrats would not support the current version of the bill on the Senate floor. The party is demanding several changes, including an amendment to limit investment opportunities for lawmakers and officials like the president.
“We still have a lot of work to do,” Alsobrooks told NOTUS. “I voted in committee, to ensure that we could continue conversations and negotiations on that bill. … We’re all really leaning in to make sure we get to the finish line, but I will be a ‘no’ if those issues are not resolved.”
Those renewed demands came after an amendment introduced by Van Hollen to ban members of Congress and high-ranking government officials — including the president, vice president and their families — from owning, promoting or affiliating with crypto companies, failed in committee.
President Donald Trump and his family own stakes in World Liberty Financial, the decentralized finance platform and stablecoin issuer which is expected to receive a federal banking charter soon. The company has been at the center of Democrats’ accusations of corruption by the president, and Democrats still want the provision in the final bill.
“That amendment is essential to moving the bill forward,” Van Hollen said.
Democrats are also demanding that the bill strike the Blockchain Regulatory Certainty Act, which protects software developers from criminal prosecution if their software is used illegally. Critics argue the bill’s current language fails to meaningfully regulate people who move money on digital asset marketplaces and complicates law enforcement’s work to identify people involved in crimes.
Still, financial industry groups are optimistic that Democrats can iron out the wrinkles of the committee bill in the upcoming weeks.
“Democrats are working very diligently to get this done, and get it across the line. They understand that there’s not federal regulation on this space right now, and that if we don’t get this done, consumers are not going to have the protections that are afforded in this bill” said Max Raymond, the director of financial policy at the Chamber of Progress, a tech industry coalition backing the CLARITY Act.
Raymond, the Chamber of Progress official, said the industry supports the bill because it is an opportunity to do away with the de facto “regulation by enforcement” that has prevailed for years.
“Folks are in favor of this since they want long-term certainty,” Raymond said. “Folks are behind it because they want clear rules to operate in.”
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