Business 4 min read By Arthur Ellington
Crypto's Washington gamble: from rebels to power players
The cryptocurrency industry has transformed from a libertarian outsider movement into a major political force in Washington, spending millions to influence elections and hiring former regulators. But its recent strategic missteps raise questions about whether it can mature from insurgent to establishment.
The cryptocurrency industry has completed a remarkable transformation from a libertarian outsider movement into a fully fledged Washington power player, spending millions to influence elections and hiring former regulators in the same manner as Big Oil and Big Pharma. But its recent strategic missteps suggest the sector has yet to master the art of political influence, raising questions about whether it can evolve from insurgent to establishment.
Big Crypto, led by firms such as Coinbase and Ripple, first arrived as a major political player in 2024. Last week, the industry's largest Super PAC revealed it would spend $30 million to influence the outcome of the US Senate race in Ohio. Meanwhile, its biggest trade group, the Blockchain Association, is searching for a new leader after its current head—a revolving-door hire from the Commodity Futures Trading Commission—decided to step down after barely a year, despite a salary of at least half a million dollars.
The industry's journey to this point represents a profound shift. When Satoshi Nakamoto published the Bitcoin white paper in 2008, it emerged from a small group of libertarians who distrusted banks and government in equal measure. That ethos persisted among crypto true believers for years, and many blockchain executives wanted little to do with Washington. The decision by the current generation of leaders to trade those ideals for conventional lobbying can be seen as a betrayal of the movement's founding principles.
Yet there is a counter-argument: by 2024, it had become clear that then-SEC Chair Gary Gensler was waging an aggressive campaign to destroy the crypto industry altogether. In that environment, firms like Coinbase and Ripple faced a fight-or-die situation and did what it took to survive—playing the Washington game.
If politics has become an intrinsic part of crypto, the issue is not so much that blockchain companies are flexing their muscles in Washington, but that they are doing a poor job of it. The Ohio campaign is a case in point. The state's Democratic Senate nominee holds a dim view of crypto, but waging a $30 million scorched-earth campaign against him seems unwise when his party is poised to take back one or both houses of Congress. Similarly, the failure to hire an effective leader for the Blockchain Association has diminished the industry's influence on Capitol Hill.
The crypto industry has found plenty of people in Washington willing to spend its money. The harder task is developing a political strategy for an era in which it is no longer an underdog fighting a hostile government, but a dominant fixture in the corridors of power. In venture capital circles, this is known as the moment «the pirate becomes the Navy».
For crypto companies, that means accepting more responsibility as they take over an ever-greater portion of the global financial system. It also means working on the industry's image at a time when, according to several polls, crypto is even less popular with the public than Big Oil or Big Pharma. Too many crypto executives still want to be seen as upstart rebels even as they wield significant power in Washington. They cannot do both.
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