Bloomberg: With the Democratic Party regaining control of Congress, are the good days for the cryptocurrency industry in Washington over?
*Author: [Teresa Xie, Scott Patterson, Bloomberg](https://www.bloomberg.com/news/articles/2026-11-07/crypto-s-trump-fueled-washington-boom-reaches-its-endgame)*
*Compiled by: Jiahua, ChainCatcher*
### **Political Advantage is Fading**
The political fortune of the crypto industry in Washington has abruptly come to an end. With the Democratic Party sweeping both houses of Congress in the midterm elections and set to take control, the crypto industry faces stricter regulations, and its relationship with President Donald Trump will be scrutinized more closely.
Over the past two years, the crypto industry has enjoyed a level of treatment in the U.S. capital that few businesses can match: a president who prioritized digital assets as a national priority while amassing personal crypto wealth; regulators who cleared obstacles for broader applications of crypto assets; and a Congress controlled by Republicans that was supportive of the industry's demands.
Now, as this unusual political advantage fades, the crypto industry faces a tougher challenge: how to establish lasting influence in the financial sector. The Democratic Party's sweep of Congress may make it harder for the industry to push for comprehensive legislation that aligns with its demands, while also increasing the likelihood of congressional investigations into Trump's crypto business.
"The crypto industry has many key figures allied with the Trump family," said Austin Campbell, a crypto expert, former banker, and current adjunct professor at New York University's Stern School of Business. "They will likely have to face the consequences."
*In August, President Donald Trump met with crypto industry executives at the White House in Washington.*
### **Crypto Legislation Will Face Greater Resistance**
It is well known that Trump launched his own digital asset, invited crypto industry executives to the White House, and incorporated the industry's demands into his policy agenda. Meanwhile, significant victories achieved by the crypto industry are closely tied to his presidency, but Trump's personal financial interests have complicated the industry's efforts to garner broader political support.
These contradictions became evident in September when the Senate failed to advance the CLARITY Act. The bill was intended to establish clearer rules for exchanges and other digital asset businesses. Trump's crypto business became a focal point of controversy, but disagreements over stablecoin rewards, investor protection, and competition in the banking sector also contributed to the deadlock.
Now, the elections will change the landscape of this legislative debate. The Democratic Party has signaled plans to strengthen restrictions on conflicts of interest and consumer protections, as well as expand the SEC's role in regulating digital assets. These changes will diverge from the regulatory framework sought by many crypto companies during the Republican-controlled Congress, but if the industry can gain bipartisan support, it may open a new path for legislation.
Adam Minehardt, Chief Policy Officer at Hyperliquid Policy Center, stated, "As the industry readjusts to the new congressional leadership, it will take a defensive posture at least initially."
The significant political contributions made by the crypto industry may also have consequences. In 2024, crypto lobbying groups spent millions supporting the campaign against then-Senator Sherrod Brown, who ultimately lost. Now, Brown has defeated Ohio Republican Senator Jon Husted and regained his Senate seat. Research firm Capstone noted that Brown may hold an important position on the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission (CFTC), a key crypto regulatory body.
*Former Senator Sherrod Brown campaigns in Brook Park, Ohio.*
The Democratic control of Congress also means it has greater power to investigate Trump's business interests. Lawmakers have requested information regarding the business ventures involving the president and his family. Trump has consistently denied any conflict between his business interests and presidential duties.
California Congresswoman Maxine Waters has been a vocal critic of Trump's relationship with the crypto industry, and she is expected to exert greater influence on the House Financial Services Committee; Massachusetts Democrat Elizabeth Warren is anticipated to lead the Senate Banking Committee.
"As the power of committee chairs increases, a series of real oversight actions will unfold," Minehardt said. "We have already seen signals from various congressional offices. They will start from various leads to see what they can uncover."
Nevertheless, many of the achievements made by the crypto industry are difficult to overturn. Repealing the federal stablecoin law requires new legislation, and the SEC and CFTC are still in the process of formulating relevant rules, which may further integrate digital assets into traditional financial markets. Regardless of the election outcome, these efforts can continue during Trump's presidency, although future administrations may reassess the decisions made by regulatory agencies.
Tyler Gellasch, CEO of Healthy Markets Association, stated that Congress indeed has tools to influence regulatory agencies, such as controlling appropriations. Congress can seek to prevent agencies from using funds for policy matters they oppose. He noted that Republicans have used this tool for years to block the SEC from establishing political spending disclosure rules. He also mentioned that Congress can investigate the decisions of regulatory agencies and their relationships with politically favored companies.
*Bitcoin signage on the streets of New York.*
### **Beyond Regulation, the Crypto Industry Faces Security Challenges**
The market presents another challenge. Regardless of which party is in power, Bitcoin has historically experienced dramatic cycles of boom and bust, making it difficult to attribute its price outlook solely to political changes in Washington. Despite the regulatory easing and political support during Trump's presidency that sparked hopes for a golden age of digital assets, Bitcoin remains far below its previous highs.
The recent Binance hack highlighted another challenge: security. The exchange suffered a loss of $6.3 billion but has since compensated for the stolen crypto assets by combining corporate funds and two insurance funds.
Peter Atwater, an adjunct economics professor at the College of William & Mary, stated, "The crypto industry needs to make these hacking incidents disappear from the headlines. Repeated occurrences will have an impact. It will be worth watching whether the Democrats will push for a regulatory shift that places greater emphasis on security and robust operations."
Overall, the future of the crypto industry depends far beyond its alliance with Trump. Today, the realm of digital assets has expanded to include investment funds, stablecoin payments, and financial infrastructure, with institutions involved having long-term interests that will not vanish with the end of a presidential term. For an industry looking to attract clients from diverse political backgrounds, reducing partisanship may ultimately be an advantage rather than a setback.
Crypto industry advocates have begun to emphasize their bipartisan appeal.
Ji Kim, CEO of the Crypto Council for Innovation, stated, "Digital assets have always had bipartisan support, and we are ready to work with both new and returning members of Congress."