Powerful corporate interests have long had outsized influence in Washington, D.C., using their financial resources to influence elections and hire former regulators to impose policies favored by lawmakers. These practices have resulted in some industries becoming an integral part of the country’s political fabric, giving rise to unflattering nicknames such as “Big Oil,” “Big Pharma,” or “Big Food.” In recent years, a newer industry has joined them – an industry that was once known as the “blockchain community,” but is now more accurately referred to as “big crypto.”
Big Crypto first emerged as a major player on the political stage in 2024 and, led by companies like Coinbase and Ripple, has delved into all of Washington’s dirty mores. That was made clear last week when the industry’s largest super PAC announced it would spend $30 million to influence the outcome of Ohio’s U.S. Senate race. Meanwhile, its largest trade group, the Blockchain Association, is looking for a new leader after the current leader — a revolving-door employee at the CFTC — decided to step down after nearly a year on the job despite drawing a salary of at least half a million dollars.
One can only wonder what Satoshi Nakamoto would think of this. When he published “Bitcoin: A peer-to-peer electronic monetary systemIn 2008, it was part of a small group of libertarians who distrusted the banks and who distrusted the government even more. This ethos persisted for years among true crypto believers, and even many blockchain executives long wanted little to do with Washington, DC
The decision of the current generation of cryptocurrency leaders to trade these ideals for swamp politics can therefore be seen as a deep betrayal. On the other hand, one can argue that they had no choice. By 2024, it had become clear that then-SEC Chairman Gary Gensler was waging an obsessive and malicious campaign to destroy the crypto industry as a whole. In this environment, companies like Coinbase and Ripple faced a fight-or-die situation and did what they had to to survive – which in this case meant playing the Washington game.
The question is where it all goes next. Accepting that politics has become an integral part of crypto, the problem is not so much that blockchain companies are flexing their muscles in Washington, but that they are doing a poor job of it. Last week’s anecdotes are a prime example. Sure, Ohio’s Democratic Senate candidate has dark opinions on crypto, but it seems unwise to wage a $30 million scorched-earth campaign against him while he and his party are on the verge of retaking one or both houses of Congress. Likewise, the failure to hire an effective leader for the Blockchain Association has diminished the industry’s influence in the Capitol.
The crypto industry has found many people in Washington willing to spend their money. Now let’s see whether it can achieve the more difficult strategic goal of developing a political strategy for the current era – one in which it is no longer an inferior industry fighting a hostile government but a dominant component in Washington’s corridors of power. To use a historical metaphor popular in the venture capital world, this is a “pirate becomes navy” situation.
For crypto companies, this means they must take on more responsibility that comes with taking over an ever larger portion of the global financial system. It also means doing more for the industry’s image at a time when crypto is even less popular in the public’s eyes than Big Oil or Big Pharma, according to several surveys. Right now, too many crypto executives want to be seen as rising rebels, despite wielding significant power in Washington, DC. You can’t do both.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
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