Nearly $200 Million in Lobbying Goes Down the Drain: Washington Turns, and Crypto Faces Headwinds

The crypto industry spent $195.8 million in 2024 to buy a friendlier US Congress. On Tuesday, the ballots handed both chambers to the Democrats — and the man the industry spent $40 million trying and failing to stop is coming back.

The fallout goes far beyond wallets. Bitcoin holders, crypto stock investors and every exchange in the country are all waiting for the same thing: a federal law that spells out who regulates crypto. Starting in January, that law will have to be advanced by a party whose agenda leaders have spent this year interrogating the industry — and the president's own crypto earnings.

Why is the crypto industry's wish list now harder to pass?

1. Every crypto bill now needs Democrats

According to PBS, Democrats took Senate seats in Texas, Kansas, Iowa and Ohio that Republicans had been defending. CBS News projects Democrats will control both chambers. The new Congress takes office in January.

For the crypto industry, that is an arithmetic flip. Previously Republicans set the agenda, and the industry needed to bring along a handful of Democrats to reach 60 votes in the Senate. From January on, Democrats decide which bills get to a vote.

Ohio was the race the crypto industry felt most keenly. Sherrod Brown, former chairman of the Senate Banking Committee and a longtime critic of crypto, won back a seat. He led Republican Senator Jon Husted 48.6% to 46.5% with 87% of the vote counted at the time.

Two years ago, the crypto industry spent $40 million on ads attacking him, and he lost. This year the same groups said they would spend even more to stop his comeback. He won anyway.

The crypto lobby has now spent roughly $95 million on one man. $40 million in 2024 to defeat Sherrod Brown. More than $55 million this year to stop his comeback. Brown is going back to the Senate. An expensive lesson. — The Wolf Of All Streets (@scottmelker) November 4, 2026

2. The CLARITY Act was already on life support

The CLARITY Act is the crypto industry's most important bill. It would determine which regulator oversees crypto tokens and trading platforms — the US Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).

The House passed it in July 2025 by 294 to 134, with members of both parties voting in favor. Then it ran into the Senate.

According to law firm Orrick, a procedural vote on September 15 ended 49 to 50 and failed to reach the 60 votes required. And at that time Republicans controlled both chambers.

Two fights are holding it up. The first is ethics. Lawmakers are at odds over restrictions on federal officials holding and profiting from crypto assets while they write the rules.

The second is money. Crypto companies want to pay yield on dollar-pegged stablecoins, while banks worry those yields will pull deposits out of their accounts.

The bill is not dead. Senator Thom Tillis voted no deliberately so that he could move to put the bill back on the agenda. But Orrick notes that the widespread industry view is that passage this year is unlikely.

3. Without a law, the rules stay temporary

Crypto business in the US today runs mainly on rules written by the agencies themselves. A change of administration can rewrite those rules, and Trump's term ends in January 2029.

Orrick notes that without a federal law, other rulebooks will continue to govern most crypto activity. Only stablecoins have their own law — the GENIUS Act, passed in 2025.

Even before the ballots were counted, crypto traders were fearing a Democratic sweep. Mary Cull of Cryptex Finance told American Banker that Democratic control of the Senate would make the bill harder to pass. She also discussed where the industry stands under Trump.

"Under this administration, I think crypto is the favored child," Cull said, according to American Banker.

From January on, who holds crypto's fate?

4. Two of the crypto industry's sharpest critics will get chairmanships

American Banker reports that Senator Elizabeth Warren is likely to become chair of the Senate Banking Committee. That committee handles crypto bills in the Senate.

Warren was already the committee's ranking Democrat. This year she co-signed letters urging the Trump administration to respond on Binance, and demanded hearings on the Trump family's crypto earnings.

In the House, Representative Maxine Waters is expected to chair the Financial Services Committee. Representative Sean Casten may challenge her, but American Banker reports that on seniority she should prevail.

How the US midterms will affect crypto. According to AP's state-by-state vote counts, Democrats won control of both chambers of Congress in the November 3 midterms. The new Congress will be sworn in on January 3, 2027. Until then chairs hold real power: they decide which bills get hearings, they can call executives to testify, and they can issue subpoenas — legal orders requiring documents to be handed over. — OXMallam.hl (@Adellbah) November 4, 2026

5. Trump's crypto empire becomes a target

The sums involved are large. According to financial disclosure documents reported by AFP, Trump earned about $1.2 billion from crypto in 2025.

About $635 million of that came from royalty splits on the $TRUMP memecoin — a coin launched hours before his inauguration. Nearly $550 million came from the family crypto company World Liberty Financial.

Buyers of World Liberty's WLFI token are worse off. According to AFP, after the token began trading in September 2025, it fell from 46 cents to 6 cents.

In July this year, five Senate Democrats including Warren put the family's crypto earnings at $1.4 billion in an open letter. They demanded hearings, and cited reports that the UAE bought a 49% stake in World Liberty.

Bart Naylor of the consumer group Public Citizen expects Democrats to go after these businesses, possibly using subpoenas. Public Citizen argues the deals raise questions under the emoluments clause, which bars the president from receiving payments from foreign governments.

Congress has already investigated World Liberty Financial. The White House denies the criticism. According to AFP, the White House says the president and his family have never been involved in conflicts of interest.

"Democratic control also brings subpoena power, scrutiny of Trump-linked crypto businesses, and influence over future nominees for regulatory posts," one X user noted.

6. After the Binance hack, exchanges will face sharper questioning

In an October 30 statement, Waters cited reports that Binance was hacked the previous week, losing about $6.3 billion. Those reports linked the attack to North Korean state-level hackers.

She said millions of customers were unable to withdraw funds at the time, while Binance is raising billions of dollars to cover compensation.

Rep. Maxine Waters has just weighed in on the Binance hack. She called it "a wake-up call for anyone who thinks the crypto industry can operate without strong accountability." Her demands: stronger consumer protections, stricter cybersecurity standards, and real accountability. — SJ (@patelsjxrp) October 31, 2026

Waters then turned the subject to politics. She noted that Binance founder Changpeng Zhao (CZ) put more than $2 billion into World Liberty Financial before being pardoned by Trump. She also said the SEC withdrew its fraud case against Binance and Zhao.

Senate Democrats raised similar concerns in February this year. Their open letter said Binance pushed users to buy World Liberty's dollar stablecoin USD1.

Waters called for stricter consumer protections, financial crime controls and cybersecurity standards across the industry.

"Americans have a right to know their money is safe," she said.

Is this really bad news for Bitcoin?

7. History and the direction of regulators point the other way

Not every Democrat is against crypto. The CLARITY Act passed the House on a bipartisan vote, so dozens of Democrats voted in favor.

The industry bet on both sides. In 2024, Fairshake spent about $14 million supporting Democratic candidates, according to FactCheck.

Regulators are also still moving forward. The SEC proposed crypto rules on August 18. Orrick notes the CFTC also sent its own draft to the White House for review on September 17. Still, binding rules may be more than a year away.

The market's reaction to midterms has not been large either. Since 1982, the S&P 500 has risen after every midterm election, and Bitcoin has also closed higher a year after the recent midterms. On the night results were coming in, Bitcoin and US stock index futures swung back and forth with the news.

Crypto's money machine has not slowed either. According to FactCheck, Fairshake had raised nearly $137 million for this year's elections by June 30. It still could not stop Brown.

The next test comes before January. If the CLARITY Act does not advance in the final weeks of this Congress, the crypto industry's most important bill will have to start over in the hands of Warren and Waters.

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