Crypto Is Spending $30 Million to Smash a Democrat. How It Could Backfire. — Barrons.com

By Joe LightThe crypto industry is unleashing its campaign war chest on a Democrat in a critical Senate race. The strategy could come back to haunt crypto firms.Fairshake, a political action committee backed by executives from Coinbase and other industry heavyweights, on Monday said it's spending at least $30 million on advertisements against former Ohio Sen. Sherrod Brown, a Democrat who's trying to re-enter the Senate in the November midterm elections.Brown was one of crypto's most prominent opponents when he chaired the Senate Banking Committee, and the industry spent big to sink his reelection bid in 2024.Fairshake and its affiliates have more than $120 million to spend on the midterm campaigns, making it one of the most powerful industry PACs. The spending announcement comes after the Senate failed to pass the Clarity Act, an industry-supported bill that would have taken most crypto trading out of the purview of securities regulators.Fairshake had held off on most ad spending as deliberations were under way. With all Democrats voting against the Clarity Act, the PAC is expected to unleash the floodgates, with Democrats as the top target.A Fairshake spokesman said that the PAC planned to make additional midterm spending announcements in the coming days and weeks.Ohio could end up being the tipping point between Democrats or Republicans having control of the Senate next year. If Brown wins his race against Republican incumbent Jon Husted (R., Ohio), it likely means Democrats will have also gotten enough votes to take Senate seats in North Carolina, Maine, Michigan and all the other states they need to tip the balance of power.Fairshake jumping into the race is a two-edged sword for the crypto industry. The PAC's spending power means that other Democratic candidates will be loath to be seen as a crypto opponent lest they too become a target. On the other hand, the spending risks cementing lawmakers' perception that crypto is a pro-GOP sector that is a lost cause for their support.If Democrats write off crypto for good, that would be devastating to the prospects that the Clarity Act or anything similar can become law in future years. To avoid a Senate filibuster, such acts require votes from at least 60 senators, meaning at least some Democrats will need to join Republicans to advance a bill.In lieu of legislation, regulators at the Securities and Exchange Commission and Commodity Futures Trading Commission are moving on their own with orders and proposed rules that would accomplish much of what the Clarity Act would cement into law. Those moves will protect crypto for the rest of the Trump administration, but a hostile White House under a new president can reverse course."It is difficult to invest in a new business if the rules can change radically in just two years," wrote TD Cowen analyst Jaret Seiberg in a research note on Monday.Write to Joe Light at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.