A new report warns that cryptocurrency’s growing political influence in the U.S. could bring “profound risks” as industry leaders ramp up spending to shape regulations in their favor. With Donald Trump’s administration actively embracing digital assets, crypto firms are gaining unprecedented access to policymaking, fueling debates over transparency, oversight, and long-term market stability.
Crypto’s Political Power Surge
According to the Center for Political Accountability (CPA), crypto companies spent over $134 million during the 2024 elections, far surpassing other industries in political contributions. Giants like Coinbase and Kraken reportedly donated $1 million each to Trump’s Inaugural Fund, securing a seat at the table as the administration dismantled previous regulatory barriers.
One of Trump’s first major moves was to remove former SEC Chair Gary Gensler, a known crypto critic, and replace him with an industry-friendly alternative. Under his leadership, the SEC had pursued legal action against several exchanges, but those cases—including ones against Coinbase and Kraken—have now been dropped.
CPA President Bruce Freed noted that crypto money played a decisive role in shaping election outcomes, particularly in races where crypto-skeptical lawmakers lost. For example:
- Katie Porter, a progressive and vocal crypto critic, lost her Senate primary bid in California amid heavy anti-crypto spending.
- Sherrod Brown, former Senate Banking Committee Chair and crypto skeptic, was defeated in Ohio by Republican Bernie Moreno, a pro-crypto advocate.
The Birth of a U.S. Crypto Strategic Reserve
As part of this shift, Trump has moved forward with establishing a “U.S. Crypto Strategic Reserve”, a move that has sparked both excitement and controversy. The initiative, which was announced on Trump’s social media, aims to use taxpayer money to stockpile Bitcoin, Ethereum, Solana, XRP, and Cardano to ensure the U.S. remains the “Crypto Capital of the World.”
On March 7, Trump signed an executive order officially creating the reserve, just one day before hosting a White House Crypto Summit. The event brought together top industry figures, policymakers, and investors to discuss crypto’s future role in the U.S. economy. The summit was followed by a private reception hosted by Coinbase, further solidifying the relationship between the government and crypto firms.
Ethical Concerns and Potential Conflicts of Interest
The CPA report raises concerns over potential conflicts of interest, particularly regarding David Sacks, Trump’s newly appointed “Crypto Czar.” While Sacks claims to have divested from his personal crypto holdings, questions remain about his investment firm, which could benefit significantly if the government moves forward with large-scale crypto purchases.
“The aggressive push for deregulation, combined with opaque and unaccountable political contributions, has raised red flags among regulators and eroded investor confidence,” the report states.
What’s Next for Crypto Regulation in the U.S.?
With the crypto industry deeply embedded in Washington, questions remain about how far deregulation will go and whether traditional financial institutions will push back. While Trump’s pro-crypto stance has driven enthusiasm among investors, it has also raised concerns about market manipulation, transparency, and government oversight.
The next few months could be critical in shaping the regulatory framework for digital assets, determining whether crypto truly becomes a core part of the U.S. economy or remains a volatile sector prone to influence from big money.
One thing is clear: the battle over crypto regulation is far from over—and the industry is more politically powerful than ever before.
