New crypto-friendly politicians are heading to Washington

As the crypto faces what many are calling its biggest crisis yet, a number of new politicians are lining up to take their seats on Capitol Hill as stricter regulations are likely looming.

“It is difficult to know how these midterm elections will affect the design of an overall cryptoregulatory framework for the United States,” said Joseph Collement, general counsel at Bitcoin.com. “Some believe that Republicans are more friendly to our industry, while others believe that there may be a growing bipartisan consensus to formulate friendly and pro-growth regulations.”

Issues surrounding digital assets were more important than ever this past election cycle, according to GMI PAC, a crypto-focused group backed by SkyBridge Capital’s Anthony Scaramucci. “Crypto voters,” which pollsters described as owning or considering owning digital assets, make up 44% of American voters, GMI PAC found.

As the results continue to roll in, fans of the industry should be pleased to see many crypto-minded candidates have secured a seat on Capitol Hill, which appears to have come at a pretty crucial time.

New names on the Hill

Harriet Hageman, R-Wyo., for example, took over outgoing Rep. Liz Cheney’s seat. The lawyer is keen to maintain the state’s growing autonomy over crypto-related matters, she said during a July debate.

“I think that’s something we need to explore, but we want to keep the federal government out of it,” Hageman said, referring to cryptocurrency mining in Wyoming.

Crypto is “an important states’ rights issue,” she added.

Sen. Rep. Cynthia Lummis, R-Wyo., a vocal cryptocurrency advocate, praised Hageman’s win Tuesday night, calling her an “excellent teammate” to have in Washington.

Rep. Rep. Jonathan Jackson, D-Illi., will also make his House debut in January, thanks largely to an influx of donations from crypto-related political action committees. Three PACs, DAO for America, Web3 Forward and Protect our Future, were all significant donors to Jackson’s campaign.

Protect Our Future PAC is bankrolled by the once revered crypto billionaire Sam Bankman-Fried. His PAC bought $500,026 in TV ads, according to the Chicago Sun-Times, during the last campaign cycle.

Crypto could have been enough to sway some voters’ choices, said Bobby Kaple, senior adviser to GMI PAC.

“Both parties are in a battle to connect with younger black and Hispanic males — groups that have shown in recent cycles to be less calcified in their party preferences. These groups also own crypto at much higher prices,” Kaple said . “Connecting with them on crypto issues can unlock just enough support to win some of these tight races.”

Cautiously optimistic

Congressional Blockchain Caucus Chairs Tom Emmer, R-Minn., and Bill Foster, D-Illi., both won re-election as well as Caucus members Josh Gottheimer, DN.J., and Richie Torres, DN.Y. The group, which “believes in the future of blockchain technology” supports a “light touch regulatory approach,” according to its website.

Meanwhile, New York Governor Kathy Hochul won permanent office, which could have an impact on bitcoin mining in the state. The former lieutenant governor has yet to choose to sign or veto a crypto-mining bill, which would affect proof-of-work operations.

Kristin Smith, CEO of the Blockchain Association, is confident bipartisan consensus can be reached, especially given the promising cross-aisle initiatives seen in the past 18 months. But politicians will not ignore the fall of one of the most trusted names in the industry, she warned.

“We had crises in the summer, but this is a different level of crisis, and it’s going to take time [lawmaker’s] attention,” Smith said. “As this continues to make headlines, which I think it will for some time, Congress will want to respond.”

It’s worth noting that Binance and FTX are not US-based exchanges, Smith added, in fact each launched its own US subsidiary when the companies were forced to halt operations in the country. Binance US rolled out in 2017, followed by FTX.US in 2019.

“American stock exchanges don’t work like that … that’s not what they do,” Smith said. “But that said, I don’t think that’s going to stop Congress from wanting to act.”

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