The encryption industry has established a $263 million political war chest, aiming for control of the U.S. Congress in the 2026 midterm elections?

According to Bloomberg, the Crypto Assets industry is accelerating its layout for the 2026 midterm elections after a significant victory in the 2024 elections. According to Federal Election Commission documents and public statements, several super political action committees in the Crypto Assets sector have raised approximately $263 million in war funds, which is nearly double the spending amount of the largest committee, Fairshake, in 2024. With the Republican Party controlling both houses of Congress and passing industry-supportive legislation, as well as the Trump family's public support for Crypto Assets, emerging super PACs are changing their previous strategies to more firmly align with the Republican Party, which may help the party maintain control of Congress.

Scale of Funds and Industry Transformation: From Political Margins to Power Center

Record political funding reserves

The Crypto Assets industry is investing in the American political process on an unprecedented scale. The $263 million funding slightly exceeds the total spending of the entire oil and gas industry in the last election cycle, demonstrating the digital assets industry's ambition for political influence. This funding reserve is primarily distributed among several major super PACs:

• Fairshake: As the largest crypto super PAC, it had $141 million in funding by the end of June, with supporters including Coinbase, Ripple, and other major American crypto players, as well as the venture capital firm Andreessen Horowitz.
• Digital Freedom Fund: Announced by CEX co-founders Tyler and Cameron Winklevoss, donated $21 million in Bitcoin.
• First Principles Digital PAC: Self-described as a “Republican-led, Republican-focused organization,” dedicated to electing leaders who support Crypto Assets.
• Fellowship PAC: Just launched in September, has secured $100 million in committed funding.

Fundamental shift in industry status

Cody Carbone, the CEO of The Digital Chamber, an advocacy organization based in Washington, pointed out: “The success the industry achieves in 2024 creates a roadmap or blueprint, showing that whether you are an industry CEO or just a consumer, the crypto space has a voice and can influence elections. There will be more participants getting involved, and there will be more funding投入.”

Political Strategy Shift: From Bipartisan Balance to Republican Leaning

The Realistic Basis of Strategy Evolution

After the spending spree in 2024, the Republicans hold a majority in both houses of Congress, and lawmakers passed industry-backed legislation, confirming friendly regulators to key positions. This influence was again evident last week when President Trump pardoned Zhao Changpeng, the co-founder of the crypto assets exchange Binance.

The legislative victory combined with the Trump family's support for encryption has led some of the latest super PACs to diverge from previous strategies, increasingly solidifying their stance on the Republican side, which may help the party maintain control of Congress.

specific campaign interference cases

Even in 2024, most of the funds that Fairshake spent in the election were used to elect Republicans, including a record-breaking $40 million to successfully defeat then-chairman of the Senate Banking Committee, Sherrod Brown of Ohio. This time, there are more super PACs, and some organizations are more explicitly allied with Republican candidates.

The Digital Freedom Fund is targeting Brown, who is trying to return to the Senate, while the First Principles Digital PAC has endorsed Mike Rogers, who will run for the vacant Senate seat in Michigan in 2026.

Legislative Advancement and Lobbying Strategies: Market Structure Bill Becomes the Focus

Core Policy Priorities

The industry is leveraging its political donations to advance a series of legislative and regulatory priorities. The current focus is on a crypto market structure bill that would comprehensively reform the oversight of digital assets and could potentially empower the Commodity Futures Trading Commission, which has been more friendly towards encryption, with greater authority.

To encourage the passage of the bill, about a dozen top crypto executives traveled to Washington last week. Despite the political maneuvering surrounding the government shutdown, they met for over an hour with a group of leading Republican senators and had longer meetings with Democratic senators, including minority leader Chuck Schumer.

expansion of policy demands

The ambitions of crypto executives go beyond the market structure bill, which Republicans hope to pass before the midterms. They also include changes to the taxation of crypto assets, rules regarding money laundering and sanctions, and the regulation of decentralized exchanges.

Some donors are also focused on state and local elections, such as the New York City mayoral race, where crypto entrepreneur Brock Pierce donated over a million dollars to a group supporting Eric Adams just days before he ended his campaign.

The Democratic Party's Predicament and Industry Response: Loss of Trust and Reevaluation

concerns within the Democratic Party

Among the Democrats sitting on the other side of this firepower, anxiety is growing. Erik Balsbaugh, who previously worked for the campaigns of Elizabeth Warren and Hillary Clinton, is the executive director of a new group called Open Frontier, which aims to align more “progressive voices” with Crypto Assets.

Balsbaugh said: “Many people on our side are trying to understand this industry. There is no credible messenger. There are many trust breakdowns in the encryption field.”

A stark contrast in the attitudes of the two parties

This party dynamic played a role during the meeting between crypto executives and lawmakers last week. Sergey Nazarov, co-founder of Chainlink Labs, stated that Republicans, including Tim Scott, the chairman of the Senate Banking Committee from South Carolina, clearly expressed that they align with the industry's priorities. On the other hand, Democrats came to the meetings with pointed questions about the use of Crypto Assets in money laundering and decentralized finance.

Ways for Enterprises to Participate: From Political Donations to Direct Cooperation

diversified support methods

Crypto companies and executives have found various ways to provide financial support for policymakers and Trump's projects:

• Business Cooperation: Business transactions between crypto companies and Trump family's crypto enterprises.
• Event Donations: Other companies donated to the January inauguration and the June military parade.
• Infrastructure Support: Several companies are funding the new White House banquet hall, costing $300 million.

Tether's special role

A major unknown in the conversation is Tether, the stablecoin company based in El Salvador that has close ties with Cantor Fitzgerald. According to The New York Times, supporters of Fellowship are expected to include Tether, which recently established a U.S. entity. In August, the company announced it would begin offering U.S. domestic products and hired Trump's former top encryption staffer Bo Hines to lead the effort.

Tether CEO Paolo Ardoino stated in an interview last week that the company is in talks with several PACs. Foreign companies are prohibited from donating to super PACs, but the company's new foothold in the U.S. may allow it to contribute.

Future Outlook and Expansion Agenda: Industry Ambitions Beyond the Midterm Elections

The continuous evolution of the policy environment

Even Sherrod Brown, who has consistently criticized the crypto industry, has softened his stance. Brown's campaign manager Patrick Eisenhauer stated in a release: “Crypto Assets are part of the American economy and are becoming increasingly common in Ohio and nationwide.” He added that as more people adopt digital assets, Brown wants to ensure that “it expands opportunities and uplifts Ohioans, rather than exposing them to risks.”

Long-term layout of industry influence

For Nazarov of Chainlink Labs, there is a commonality in meetings with politicians: “They realize that the economic value of the industry is very high, so they need to address how to respond to it. It will only continue to grow, and they need to respond correctly.”

Conclusion

The crypto assets industry is undergoing a profound transformation from technological innovators to participants in political power. The $263 million political war fund is just the beginning of this industry's political awakening, and as the 2026 midterm elections approach, the impact of the digital assets industry on the US political landscape will become even more prominent.

For the encryption industry, political participation is not only a defensive strategy but also a necessary investment to pave the way for future innovative development. However, over-reliance on a single political party also brings potential risks, especially against the backdrop of increasing political polarization in the United States.

For policymakers, the political rise of the crypto assets industry means they must take this emerging field more seriously, finding a balance between promoting innovation and protecting consumers. As more regulatory frameworks are established and industry standards are formed, the relationship between crypto assets and American politics will continue to deepen, reshaping the financial and political landscape for the coming years.