Bought And Paid For: The Crypto Cartel’s Grip On The Most Bipartisan Thing In DC— Congress For Sale

I’ve never heard a crooked politician say, yes, I took a big contribution from this guy or this company so I’m backing their legislative agenda. Instead, like New York sleaze bag Kirsten Gillibrand, a co-sponsor of the crypto-cartel’s GENIUS Act, they all repeat a variation on “If you made your decisions on what you’re for based on who’s giving you the most money, you would fail as a member of Congress.” All the crooked Republicans say that and all the crooked Democrats say that. Isn’t that what the guillotine was invented for?

People celebrate how young and progressive Orlando Democrat Maxwell Alejandro Frost is and what a great story— albeit false— he has. But when I think of him, I think of the million dollars the crypto-cartel put into his campaign to make sure Alan Grayson wouldn’t go back to Congress. Similarly, the cartel spent over $10 million to help defeat Katie Porter in the California Senate primary, something that immensely benefitted now-Senator Adam Schiff, who immediately turned around at the first opportunity he had to vote for a key piece of their agenda.

We shared this late last December: “Just for the record, it isn't just corrupt Republicans who sold themselves to the crypto-cartel. Corrupt Democrats did the exact same thing, especially the regular suspects like Ritchie Torres (NY), Josh Gottheimer (NJ), Gregory Meeks (NY), Jake Auchincloss (MA) and Darren Soto (FL). Oh... and Adam Schiff (CA), who was sworn into the Senate early so that he could repay the cartel for helping him win that Senate primary. Schiff lined up with crypto-friendly cooks Joe Manchin and Kyrsten Sinema against Senate Democrats to make sure cartel-hated Caroline Crenshaw would not be re-confirmed to serve on the SEC. Thanks to Schifty Schiff, as Trump calls him, all 5 members of the Commission will be Republicans. Did you vote for Schiff in the primary? You did this. Please put that in your memory bank so that you'll remember in 6 years.”

There can be no doubt that the cartel spent gigantic amounts of money buying Democrats but overall last cycle about 65% of their money went to help Republicans and just 35% went to help Democrats. Reading The Times story, you’d think every Democrat was as correct as Ritchie Torres, Josh Gottehimer, Elissa Slotkin, Kirsten Gillibrand and Ruben Gallego and that Republicans are little angels with clean hands. 

Yesterday, David Yaffe-Bellany’s report on crypto-corruption almost mentioned no Republicans, even though most— by far— crypto-cash went to help the GOP. He began with morally-lose Arizona Democrat Ruben Gallego, who crypto helped to the tune of at least $10 million. Yaffe-Bellany began with a little story about how Gallego “sided with a group of Republicans in a hotly contested debate. He voted to advance the GENIUS Act, a bill backed by the cryptocurrency industry… Gallego is part of an increasingly influential cohort in Congress: beneficiaries of the crypto industry’s largess. During a tight Senate race last year, he was aided by $10 million from super PACs financed by three large crypto companies, including the Coinbase digital currency exchange. The money funded ads that promoted Gallego’s military service and support of border enforcement. Now he and dozens of other lawmakers supported by the super PACs are taking steps in Congress to advance crypto priorities, handing a series of long-awaited victories to an industry with an extensive history of fraud and volatility. In the Senate, these legislators have thrown support behind the GENIUS Act, which would pave the way for businesses to issue stablecoins, a digital currency designed to maintain a price of $1. And in both chambers, they have voted to repeal a Biden-era rule that required crypto firms to report certain tax information to the Internal Revenue Service.”

An industry spending millions of dollars to influence Congress is hardly unusual. But crypto’s political machine has stood out for the scale of its spending— and the speed of the results.

The industry has responded with glee. The spending is already “bearing fruit,” said Josh Vlasto, a spokesman for Fairshake, a super PAC that worked with two affiliated PACs to support pro-crypto congressional candidates. “This is a total sea change in terms of how Congress is approaching this industry.”

The crypto legislation is progressing just as U.S. regulators roll back a yearslong enforcement campaign. Since President Trump’s inauguration, the Securities and Exchange Commission has dropped lawsuits against major crypto firms like Coinbase and Kraken, lifting a legal cloud over the industry. An investor in crypto himself, Trump signed an executive order last month calling for the creation of a national crypto reserve— a government stockpile containing Bitcoin and other digital currencies.

The stablecoin legislation is poised to benefit Trump’s business interests. At a crypto conference in March, he said stablecoins would “expand the dominance of the U.S. dollar” and called for “common-sense” legislation. A few days later, World Liberty Financial, the crypto firm that his family helped start, announced that it would begin selling a stablecoin called USD1.

The stablecoin bill could go to the Senate floor for a vote in the coming weeks— to the alarm of some Democrats who argue that Congress is giving the industry and Trump exactly what they want.

The crypto industry has “spent a lot of money, and many of our members are beneficiaries,” said Representative Maxine Waters of California, the top Democrat on the House Financial Services Committee. “Many of them may not have taken the time to really examine what it is we’re doing.”

…During the Biden administration, the industry hired expensive lobbyists to push for federal legislation, without making much headway. The 2024 campaign was a turning point.

A group of crypto executives and political strategists formed Fairshake and two affiliated super PACs, Defend American Jobs and Protect Progress, which spent over $130 million to influence tight congressional races across the country. The spending was financed mostly by Coinbase, the digital currency business Ripple and the venture capital firm Andreessen Horowitz, which has financed more than 100 crypto start-ups.

Candidates backed by the super PACs won 53 of 58 races. In Ohio, Defend American Jobs spent $40 million to support Bernie Moreno, a Republican crypto entrepreneur who unseated Senator Sherrod Brown, the Democratic chair of the Banking Committee and an outspoken crypto critic. Protect Progress spent $10 million to help Elissa Slotkin, a Democrat, win a Senate seat in Michigan. And another $10 million from the super PACs boosted Gallego, who had spoken favorably about crypto in the past.

The industry has since set out to convert those electoral victories into legislation. Executives at firms like Coinbase, Ripple and Binance, a giant exchange that settled criminal charges with the U.S. government in 2023, have descended on Washington, meeting with lawmakers and posing for photographs on the steps of the U.S. Capitol.

Their first priority is the bill laying out rules for stablecoins. The second is “market structure” legislation that would ensure most cryptocurrencies are not subject to enforcement lawsuits by the S.E.C., which conducted a crackdown during the Biden years.

Many lawmakers backed by the crypto super PACs are positioned to advance those objectives. Moreno, Gallego and Senator Jim Banks, an Indiana Republican who was supported by the PACs, serve on the Senate Banking Committee. Gallego is also the highest-ranking Democrat on a new Senate subcommittee devoted to crypto.

A draft of the crypto market structure bill is still in the works. But a group of senators, including Senator Tim Scott, the South Carolina Republican who chairs the Banking Committee, introduced the GENIUS Act in February.

In some ways, companies that issue stablecoins are similar to banks. The coins are supposed to be backed by assets that the issuer holds in reserve: If a firm sells one million stablecoins, it should have $1 million in a vault somewhere so customers can redeem the coins at any time.

But over the years, crypto companies have been scrutinized for failing to maintain sufficient reserves. At the same time, stablecoins have become a useful tool for criminals looking to move money across borders.

In theory, the GENIUS Act addresses those problems by outlining rules for stablecoin issuers. But in February, a coalition of consumer groups called the bill “a crypto industry wish list, not an adequate regulatory regime.” They argued that the bill’s requirements were too loose and would create major risks for customers.

Even some crypto enthusiasts have expressed reservations. A provision in the GENIUS Act would allow overseas companies to get around some of its requirements.

When the bill advanced out of the Senate Banking Committee, four Democrats other than Gallego, none of whom received support from Fairshake, also voted for it, along with Moreno, Banks and 11 Republicans who weren’t backed by the crypto PACs.

A similar bill, the STABLE Act, was introduced in the House last month, prompting Democrats to raise concerns that the new rules could benefit Trump’s crypto business.

“The president of the United States of America should not be using the power of the office to create business that will enrich himself,” Waters said in an interview.

But after a marathon hearing on April 3, the House Financial Services Committee voted 32-17 [including long-time crypto kiss-ups and co-sponsors Ritchie Torres and Josh Gottheimer] to move the bill to the full chamber.

The chair of that committee is Representative French Hill, Republican of Arkansas— a longtime crypto supporter, a co-sponsor of the stablecoin bill and the beneficiary of $100,000 in spending by Fairshake.

While the crypto-cartel and AIPAC are definitely two of the most influential and visible power blocs right now, they're far from the first to wield outsized dirty-money influence over Congress. Throughout American history, there have been all kinds of political powerhouses, some more official than others. Big banks and Wall Street are the most enduring power structure in U.S. politics. In 2008 Congress fell all over itself to rescue the big financial firms that manufactured the meltdown, even when the public was screaming “no.” Why? Because the financial industry owns huge chunks of both parties through campaign contributions and a revolving door of employment. Don’t forget, Dodd-Frank was watered down after it passed, and then chipped away over time, largely thanks to Wall Street lobbyists.

But the oil and gas industry is second place to no one. These war criminals have effectively dictated U.S. foreign and environmental policy for over a century, including the Iraq War and the lack of Climate legislation and action. But are you old enough to remember the old tobacco lobby back a couple decades ago? They owned Congress for decades. Despite mountains of evidence about health risks, Big Tobacco successfully blocked regulation for over 40 years. They funded phony science, paid off politicians, and only lost their grip when public opinion shifted dramatically.

Before its recent decline, the NRA was one of the most fearsome lobbies in D.C. No matter how many kids were getting gunned down, Congress couldn’t even pass background checks— because NRA money held huge sway over lawmakers.

Even earlier, as Eisenhower warned, thMilitary-Industrial Complex is arguably the most permanent shadow government in the U.S. Defense contractors like Lockheed Martin, Raytheon, and Northrop Grumman practically write Pentagon budgets. Endless wars? Multi-billion dollar weapons systems no one asked for? That’s not just incompetence— it’s influence.

Historically White Supremacist Networks and the KKK held immense sway at various points. In the early 20th century, they had elected members in Congress and allies at every level of government, especially in the South and Indiana. They shaped laws— especially segregationist and anti-Black legislation— for decades. Think of them as the shock troops of Jim Crow, with formal and informal political backing.

And much like today’s AIPAC and crypto-cartel, there was once the Mafia, more shadowy and regionalized than systemic. The Mafia never directly controlled Congress, but they did own plenty of local politicians, judges, cops, and unions who had powerful influence over Congress. That said, their influence was more through corruption than legislative power.

Congress has long— always?— been a playground for big-money interests and power blocs. AIPAC and the crypto cartel may feel like new players, but they’re walking a well-worn path. The methods evolve, the money gets slicker, the PR firms get better— but the corruption is as old as the Republic.