View / Democrats in crypto talks are working against the campaign-season clock

Democratic senators who are trying to strike a bipartisan deal on major cryptocurrency legislation are also working against the clock as the industry prepares to flood the midterms with cash.

If the Senate talks don’t yield forward progress by next month or so, digital assets super PACs are likely to start spending big against lawmakers standing in the way of an industry-sought deal.

The network of cryptocurrency super PACs known as Fairshake, which played a key role in the 2024 cycle, has already amassed at least $141 million to spend in the midterms. This cycle has also seen the formation of two new crypto super PACs, Digital Freedom Fund and Fellowship, which are expected to spend at least $21 million and $100 million, respectively.

The moment is especially fraught for Senate Democrats because their party is more divided over whether to deliver the crypto industry its top priority: establishing rules for exchanges, brokers and issuers.

As a few of them work toward a potential path forward, people familiar with the talks described an unspoken tension between getting to “yes” — thus winning potential support on future campaigns — and being perceived by the Democratic base as caving to industry or failing to hold President Donald Trump, a proud crypto ally, accountable.

“Democrats thinking about running in 2028 are balancing support for the industry and unlocking the political support that comes with it with staying in the good graces of the progressive constituencies who can shape a primary battlefield,” one person familiar with the talks told me.

So far, senators and aides in both parties told me this week, the looming spending spree has not tainted their closed-door talks. They also acknowledged the current situation might not hold.

“Fortunately, no one has raised those issues in our meetings — and I hope it stays that way,” Sen. Cynthia Lummis, who’s pushing for a committee vote next week, told me. “We’ve just busted our bridges to try to keep this bipartisan.”

“No one can disagree that that’s a big bazooka,” the Wyoming Republican added of crypto cash. “In some ways, I wonder whether it’s being misused — not by the industry, but by the politicians.”

For progressives who oppose the crypto legislation, it’s a matter of not rocking the US’ financial system,but also of not voting to enrich the president. Trump-affiliated crypto firms netted his family billions of dollars this year even after recent losses.

And potential 2028 presidential hopefuls are closely tracking, or even involved in, the talks. Lummis said Tuesday the White House recently rejected a bipartisan ethics proposal from her and Sen. Ruben Gallego, D-Ariz., a rising star in the party.

More than 100 House Democrats voted with Republicans to pass their version of the crypto bill in July, but senators have yet to reach a consensus on key portions of their version — like those ethics guardrails, as well as illicit finance and consumer protections — as of Wednesday afternoon.

Fairshake, which is bipartisan, spent equal amounts of money on Republicans and Democrats in 2024. But its avalanche of spending in Ohio’s Senate race is widely credited for helping Republicans flip the chamber.

“I hope that we are going to approach this with the seriousness that it requires, and not be swayed by or pressured by the politics of this,” Sen. Andy Kim, D-N.J., told me.

“There’s a lot to handle, and I hope it’s not being looked at or used as this political cudgel as we get into the midterm year,” he added.

When senators gathered to discuss the crypto talks on Tuesday morning, the chairs of Senate Democrats’ and Senate Republicans’ campaign arms were both in the room. DSCC Chair Kirsten Gillibrand, D-N.Y., is a longtime advocate for crypto legislation, while NRSC Chair Tim Scott, R-S.C., also chairs the chamber’s Banking Committee.

“The Democratic Party has and should continue to be the party of opportunity and innovation,” Gillibrand said in a statement, adding that “our current bipartisan effort around market structure is around shared, universal goals” and that senators in “both parties are working in good faith right now.”