Crypto companies contributed $233 million to political committees during the 2026 US midterm cycle — part of a record $737 million that corporations poured into the elections, according to Public Citizen's analysis of federal filings. The spending coincides with a changed political map: Democrats won both chambers of Congress and will take control in January, giving the party a chance to reshape the stalled CLARITY Act, the bill designed to set federal rules for crypto markets by clarifying the division of oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

The election delivered a pointed rebuke to the industry's political spending in at least one marquee race. In Ohio, Democrat and longtime crypto skeptic Sherrod Brown, who previously chaired the Senate Banking Committee, defeated Republican Sen. Jon Husted despite crypto-backed political action committees spending $64 million to defeat him.

Senator Elizabeth Warren, one of crypto's most vocal critics in Washington and the most senior Democrat on the Senate Banking Committee, is expected to chair the panel in the next Congress — a post that carries control over which bills receive hearings and floor votes. Stronger consumer protections, tougher scrutiny of political conflicts of interest and a shift in regulatory authority are all likely to be on the docket in the next round of negotiations.

But a Democratic majority does not have to kill the prospect of crypto market structure legislation entirely. Democrat Congressman Shri Thanedar of Michigan remains hopeful the CLARITY Act can still pass, but says any legislation must include stronger ethics requirements. He tells Cointelegraph Magazine: “President Trump’s blatant corruption has set back progress on crypto legislation, so Democrats will need strong anti-corruption provisions that apply to the President, not just Congress.”

The open question is whether the industry's political influence can still be converted into legislation — and what it will have to concede to get there.

A different deal for crypto

The Senate failed to advance the CLARITY Act in September, with disagreements over ethics provisions contributing to the impasse. Under congressional procedure, any bill not enacted before a two-year Congress ends in January must be reintroduced from scratch, meaning the next round of market structure negotiations starts from a clean slate regardless of what happens to the current draft.

Democrats are already reportedly discussing how to reshape the market structure debate, with House Democrats said to be considering expanding proposals from Representative Maxine Waters, the top Democrat on the House Financial Services Committee, into a broader market structure bill. That legislation could include stronger consumer protections, a greater role for the Securities and Exchange Commission, and new ethics restrictions on public officials' crypto activities — a package that could finally separate the industry's push for clearer rules from the controversies surrounding Trump's personal crypto ventures.

Democrats have already signaled plans to investigate the Trump family's business dealings and other corporate interests, with incoming House Oversight Committee Chair Robert Garcia planning to pursue inquiries into corporate corruption.

Hadley Stern, head of institutions at Silence Laboratories and founder of Fidelity Digital Assets, says Democrats are right to "go after" those interests, and that the industry should want them to; that is "what's poisoning the bipartisan deal," he says.

"A sitting president's family launching memecoins and a stablecoin is a real governance problem," he tells Cointelegraph Magazine. "If I'd done that at Fidelity, I'd have been walked out the same afternoon."

Stern adds that the digital asset industry of 2026 looks very different from the last time Democrats "held the gavel." He points to its growth from "FTX and a bunch of tokens" in 2022 to a federal law for stablecoins, Treasuries and credit funds onchain, with tokenized equities on the way: "You don't regulate that by pretending it doesn't exist." The stablecoin statute he references is the GENIUS Act, signed into law by President Trump in July 2025.

What would the industry have to concede?

The industry may also have to accept more demanding standards if it wants legislation that can survive changes in political control.

Paul Brody, founder and CEO of Nightfall Networks and former global blockchain lead at EY, expects banks "to come out winners," as they will "push for crypto companies" to be held to the same exacting consumer protection and security standards. The industry has opposed this, he says, but tells Cointelegraph Magazine that "a wise strategy" would be to "accept similar conditions," given that blockchain-native ecosystems remain "vastly more flexible, programmable and efficient."

Lindsay Fraser, chief policy officer at Blockchain Association, also argues that consumer protection and innovation should not be treated as competing objectives. "We can protect consumers while ensuring the law reflects how the technology actually works," she says, adding that the goal is "lasting policy that earns public trust, gives builders a future in this country, and strengthens American financial leadership."

That does not mean the path to a potential compromise will be smooth. Brody notes there is still the possibility of a presidential veto, and points out that crypto is likely to be a "low priority" compared with "investigations of corruption and battles over budgets and the war."

How the Binance hack could influence lawmakers

The midterm results arrived as lawmakers were already grappling with the fallout from the Binance hack, the largest hack in crypto history, in which over $6.3 billion was stolen on Oct. 29 — raising fresh concerns about exchange security and customer protections.

Thanedar says that while the legislation "wouldn't solve every potential problem," it would provide "much-needed certainty" and "security guardrails," and that the hack offers a "clear example of the danger of not enacting appropriate legislation."

Maylea Ma, deputy general counsel at 1inch, sees it differently: rather than strengthening the case for passing the latest draft of the CLARITY Act, the incident "highlights problems the legislation does not address." The hack involved a "centralized exchange's hot wallet and signing failure," Ma says, but the current draft "has no insurer, no loss payee, and no hot wallet cap that would have mitigated the loss for Binance or imposed security standards that would have prevented the hack."

Amanda Fischer, policy director at Better Markets, said on X that the episode highlighted how "unfit for purpose the crypto ecosystem is for mainstream finance," and argued that crypto exchanges should not act as custodians, since doing so creates a "honeypot risk."

Ma says the incident is "likely to impact" the next vote on the CLARITY Act and could make lawmakers less willing to pass legislation the industry wants, unless it comes with stronger consumer protections.

Crypto spent years convincing Washington it deserves a seat at the table. Now it will need to agree on the obligations that come along with it.