Crypto cash helped propel allies to victory during the 2024 election. Here's how it might impact Washington.
Fresh off crypto's success in the 2024 election and with the value of cryptocurrencies like Bitcoin and XRP soaring, Brad Garlinghouse, CEO of the crypto company Ripple, said his company has already contributed $25 million towards an industry super PAC with an eye toward the 2026 midterm elections.
Crypto companies made a third of all direct corporate contributions to super PACs during the 2024 election. Of the 29 Republicans and 33 Democrats the industry backed, 85% won. Garlinghouse sees it as a major victory.
"People are like, 'Why did these companies come together and organize and say, "This matters"?'" Garlinghouse said. "And it's a reaction to a war on crypto."
A war on crypto
Garlinghouse said the Securities and Exchange Commission's approach to the crypto industry inspired Ripple and two other companies to form Fairshake, an industry super PAC, in 2023.
SEC Chair Gary Gensler, who will step down from his post on Jan. 20, led the federal government's crackdown on the crypto industry. As SEC chair, Gensler filed more than 120 lawsuits against crypto companies.
The SEC sued Ripple in December of 2020 at the tail end of the Trump administration — before Gensler was chair — alleging that its sale of the cryptocurrency XRP represented the sale of an unregistered security. Garlinghouse said Ripple has spent more than $150 million fighting the SEC in court, arguing that the digital currency XRP shouldn't be subject to the agency's registration and disclosure requirements as if it were a stock offering.
"I went to Harvard Business School. I think I'm reasonably intelligent about something like, 'What is a security?'" Garlinghouse said. "So never once had I considered the possibility that, 'OK, maybe XRP's a security.'"
Garlinghouse said it's unlikely Fairshake would exist if not for Gensler's actions against crypto companies.
In response, an SEC spokesperson said: "any amount spent by the crypto industry on legal defense or influence peddling pales in comparison to the savings lost by crypto investors to frauds and failures."
What was behind the SEC war on crypto
John Reed Stark, the former chief of internet enforcement at the SEC, says he doesn't own any cryptocurrency and has never worked for the industry. He thinks the SEC will take a much less combative approach towards crypto in the new Trump administration, but he doesn't think the SEC's actions during the Biden administration were wrong.
"Crypto is a scourge. It's not something that you want in your society. It has no utility," Reed Stark said. "It's just pure speculation."
Stark argues there's not enough transparency in the crypto industry. And he says cryptocurrency makes it easier to commit crimes ranging from ransomware to human sex trafficking and money laundering.
Sam Bankman-Fried's conviction for fraud at one of the largest crypto exchanges in the world is a case study of what can happen without proper oversight. The FTX exchange, based in the Bahamas, collapsed in 2022, imperling $8 billion in customer assets, much of it beyond the reach of U.S. regulators.
"I view that as not dissimilar than if we say Bernie Madoff went to jail, that doesn't make every hedge fund manager a criminal," Garlinghouse said. "There's a lot of good actors in crypto."
Garlinghouse said his company employs 900 people and has been working with regulated financial institutions to create a faster and cheaper way for people to send money overseas using the XRP digital currency. Ripple has also sold the digital currency XRP to investors. XRP now trades on exchanges, where people can buy or sell it in the hope of making a profit.
Getting involved in the election
Rarely in American politics has a new industry spent so much money, with such apparent impact, as the cryptocurrency business did in the last election. Ripple contributed $48 million to political action committees that supported pro-crypto Republicans and Democrats during the 2024 campaign.
In the final months of a hotly contested Senate race in Ohio, Republican Bernie Moreno received $40 million of positive ads from a crypto-funded super PAC. The ads helped Moreno defeat incumbent Democratic Sen. Sherrod Brown, the chairman of the Senate Banking Committee and an outspoken crypto critic.
"Do I think that putting that amount of money in the Ohio election had an impact? Absolutely," Garlinghouse said.
He argues that crypto-backed super PACs educated voters, and that, ultimately, they're the ones who decide who should govern in Washington.
"I think all citizens should want people in Congress, in the Senate and the House, who are going to look to, 'How do we use technologies in ways to benefit citizens?'" Garlinghouse said.
Crypto under the Trump administration
This past week, President-elect Donald Trump, who embraced crypto during his campaign, said he intends to nominate Paul Atkins to chair the SEC. Atkins, a former SEC commissioner who has done some consulting work for crypto companies, is expected to take a very different approach than Gensler.
Though he's no fan of crypto, former SEC official John Reed Stark believes voters have given Trump a mandate to govern.
"As far as these election results are concerned, the clear mandate is the SEC needs to lay off crypto," Stark said. "And that's exactly what's going to happen."
Trump's Cabinet picks, including Scott Bessent, his choice for Treasury secretary, have had very positive things to say about crypto.
In September, Trump announced that he would be involved in a new cryptocurrency platform called World Liberty Financial. Three weeks before the election, Trump announced the launch of its new digital coin, which Trump has a financial stake in.
Asked whether this was a conflict of interest, Garlinghouse replied,"Whether or not it's a conflict of interest, the voters have knowingly said, 'We want this person to be our president.' The voters have spoken more so than I have."
Regulatory changes
Garlinghouse said the strategy of putting money to work in the election was to get rules written. He argues that existing laws don't fit well with cryptocurrencies, and Congress needs to adopt new legislation governing digital assets.
"We haven't been asking to be deregulated. We've been asking to be regulated," he said. "So we have been saying, 'Hey, look, just give us clear rules of the road.'"
Over the summer, FIT21, a Republican bill with bipartisan support, passed in the House. FIT21 seeks to create a new regulatory framework for digital assets. While the SEC would still play a role, the legislation gives more responsibility for regulating cryptocurrencies to the Commodity Futures Trading Commission (CFTC), which oversees futures markets for everything from gold to pork bellies and already has some jurisdiction over Bitcoin.
The SEC is a much larger agency than the CFTC with a different mandate, Stark said. He said the SEC focuses on investor protection, while the CFTC is more focused on marketplace integrity.
"I don't blame the crypto industry for wanting to be under the CFTC," Stark said. "It's a much easier regulatory regime."
It doesn't surprise Stark that the bill passed in the House with bipartisan support.
"It doesn't pay for a member of Congress or the Senate, whoever you're talking about, doesn't pay for them to be anti-crypto," Stark said. "There's no one that's going to…give them contributions because of that."
Lawmakers from both parties told 60 Minutes that crypto firms will not escape scrutiny, since there are consumer protections in the FIT21 bill. While it's not clear whether Republican leaders will reintroduce FIT21 in the new Congress, there is bipartisan agreement that something must be done to plug regulatory gaps and prevent confusion in a market that already exists.