At the end of a three -hour hearing last month, Senator Ruben Gallego, Democrat van Arizona, chose the side of a group of Republicans in a fiercely disputed debate. He voted to promote the Genius Act, a bill that is supported by the cryptocurrency industry.
“It is clear that digital assets are here to stay,” said Mr. Gallego after the hearing of the Senate bank committee. Breaking of the top democrat of the committee, he called the bill a 'step in the right direction'.
The vote, 18 to 6, was only for the time being and went on a bill that requires approval of the entire Senate. But in the crypto world it was celebrated as a moment of justification.
Mr Gallego is part of an increasingly influential cohort in the congress: beneficiaries of the greatness of the crypto industry. During a tight senate race last year, he was helped by $ 10 million from Super PACs funded by three large crypto companies, including the Coinbase Digital Currency Exchange. The money funded advertisements that promote the military service and support of Mr Gallego for border enforcement of the border.
Now he and dozens of other legislators supported by the Super PACs in the congress to promote crypto priorities, with 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 companies to issue Stablecoins, a digital currency designed to maintain a price of $ 1. And in both rooms they voted to withdraw a rule of Biden era that obliged crypto companies to report certain tax information to the Internal Revenue Service.
An industry that issues millions of dollars to influence the congress is hardly unusual. But the political machine from Crypto has been noticed for the scale of the expenses – and the speed of the results.
The industry has responded with joy. The expenditure is already 'fruit fruit', said Josh Vlasto, a spokesperson for Fairshake, a super PAC who worked with two affiliated PACs to support Pro-Crypto Congressional Candidates. “This is a total change in the sea in terms of how the congress is approaching this industry.”
The Crypto legislation is just progressing while American supervisors reverse a long -standing enforcement campaign. Since the inauguration of President Trump, the Securities and Exchange Commission has dropped lawsuits against large crypto companies such as Coinbase and Kraken and cancel a legal cloud over the industry. An investor in Crypto himself, Mr. Trump signed an executive order last month in which it was called to create a National Crypto reserve – a government stock with Bitcoin and other digital currencies.
The Stablecoin legislation is ready to benefit Mr Trump's business interests. During a crypto conference in March, he said that Stablecoins “would expand the dominance of the US dollar” and called for “common” legislation. A few days later, World Liberty Financial, the crypto company that helped his family started, announced that it would start selling a stablecoin called USD1.
The Stablecoin law could go to the senate floor in the coming weeks for a vote – to the alarm of some Democrats who claim that the congress gives industry and Mr Trump exactly what they want.
The Crypto industry has “spent a lot of money, and many of our members are beneficiaries,” said Maxine Waters of California, the top democrat in the House Financial Services Committee. “Many of them may not have taken the time to really investigate what we do.”
Mr. Gallego was not a sponsor of the Genius Act and said that fine tuning requires. (The full name is leading and establishing national innovation for the American Stablecoins Act.) But he also defended the bill and said that it contains protection for consumers.
“Senator Gallego believes it is important to have a seat at the table and to work with colleagues on both sides,” said Jacques Petit, his spokesperson, in a statement. “It remains the priority of the senator to ensure that the correct crash barriers are present.”
In an interview, Senator Kirsten Gillibrand, a Democrat in New York who was a co-sponsor of the Genius Act, said that the expenditure of Crypto had no influence on legislation.
“If you have made your decisions about what you are based on who you give the most money, you would fail as a member of the congress,” said Mrs. Gillibrand, who was not financed by the Crypto Super PACs.
During the Biden administration, the industry hired expensive lobbyists to insist on federal legislation, without making much progress. The 2024 campaign was a turning point.
A group of Crypto leaders and political strategists formed fairshake and two affiliated Super PACs, defended American jobs and protected progress, which spent more than $ 130 million to influence tight conference races throughout the country. The expenditures were mainly funded by Coinbase, the digital currency company Ripple and the Risco Capital Company Andreessen Horowitz, which has financed more than 100 crypto startups.
Candidates supported 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 did not put Senator Sherrod Brown, the democratic chairman of the banking committee and an outspoken crypto critic. Protection Progress has spent $ 10 million to help Elissa Slotkin, a Democrat, to win a senate seat in Michigan. And another $ 10 million from the Super PACs raised Mr. Gallego, who had spoken favorably about crypto in the past.
The industry has since planned to convert those election victories into legislation. Managers at companies such as Coinbase, Ripple and Binance, a gigantic exchange that arranged criminal charges with the US government in 2023, were deducted from Washington, meeting legislators and posing for photos on the stairs of Capitol, US Capitol.
Their first priority is the bill that postpons rules for Stablecoins. The second is the “market structure” legislation that would ensure that most cryptocurrencies are not subject to the SEC to enforcement procedures, which performed a performance during the Biden years.
Many legislators supported by the Crypto Super PACs are positioned to promote those objectives. Mr. Moreno, Mr. Gallego and Senator Jim Banks, a Republican of Indiana who was supported by the PACs, served in the Senate bank committee. Mr Gallego is also the highest democrat on a new senate subcommittee dedicated to Crypto.
A concept of the invoice of the crypto market structure is still in the making. But a group of senators, including Senator Tim Scott, the Republican South Carolina, is chairman of the banking committee, introduced the Genius Act in February.
In some respects, companies that spend Stablecoins are similar to banks. The coins are supposed to be supported by assets that the issuer has in reserve: if a company sells a million stablecoins, it must have $ 1 million somewhere in a safe, so that customers can cash the coins at any time.
But over the years, crypto companies have been examined because they have not maintained enough reserves. At the same time, Stablecoins have become a useful tool for criminals who want to move money across borders.
In theory, the Genius ACT starts to outline those problems by sketching rules for stablecoin. But in February a coalition of consumer groups called the bill 'a crypto industry wish list, not an adequate regime regime'. They argued that the requirements of the account were too loose and would cause major risks for customers.
Even some crypto enthusiasts have reserved. A provision in the Genius Act would enable overseas companies to circumvent some of its requirements.
When the bill continued the Senate Bank Committee, four other Democrats than Mr Gallego, who did not receive any support from Fairshake, also voted, together with Mr. Moreno, Mr. Banks and 11 Republicans who were not supported by the Crypto PACs.
A similar bill, the stable law, was introduced to parliament last month, so that Democrats expressed his concern that the new rules could benefit Mr Trump's crypto activities.
“The president of the United States of America should not use the power of the office to create things that will enrich themselves,” said Mrs. Waters in an interview.
But after a marathon hearing on 3 April, the House Financial Services Committee voted 32 to 17 to move the bill to the entire room.
The chairman of that committee is representative French Hill, Republican of Arkansas-a old crypto-supporter, a co-sponsor of the Stablecoin Bill and the beneficiary of $ 100,000 in spending by Fairshake.
