Upcoming US elections poised to influence crypto legislation in 2025: Here’s what could happen next

The cryptocurrency industry has flooded the U.S. Congressional elections with cash, which could have a major effect on how legislation shakes out in 2025.

Fairshake, for example, has raised over $200 million in this election cycle to put behind key races, according to Open Secrets, with funding coming from large crypto firms, including Ripple and Coinbase. Some of the biggest races to be on the lookout for on Tuesday include matchups for the Senate in Ohio and Montana.

More seats in Congress will be filled by people who identify as being pro-crypto, marking a first in this election, said Alison Mangiero, executive director at the Proof of Stake Alliance, an advocacy group for technology around staking.

"Regardless of how each race shakes out, we are going to have the most pro-crypto Congress we've ever had," Mangiero said in an interview with The Block. "There will still be a lot of work to do in terms of education and in terms of the industry because we've poured so much money into these races that now the real work is going to begin."

The presidential candidates themselves have weighed in on the crypto industry, which has been unique to this election year. Vice President Kamala Harris has said her administration would encourage innovative technologies like AI and digital assets while protecting consumers and investors, according to her 80-page economic plan .

Former president Donald Trump has made his own pledge to end an "unlawful and un-American crackdown" on the U.S. crypto industry and has backed a crypto project called World Liberty Financial .

In the meantime, prediction markets have also played a significant role in this year's election. Courts ruled that prediction market Kalshi could go ahead and offer bets on the elections, and its markets went live. In the meantime, decentralized prediction platform Polymarket's betting volume for who will win the U.S. presidential race ballooned to almost $3 million as of Nov. 1. Polymarket, notably, does not operate in the U.S.

Analysts have said that prediction markets, like any market, aren't always accurate but are effective in aggregating real-time public sentiment. The Block cited Kalshi's figures to see how the election could unfold in Congress. For reference, current polls from 538 say Republicans have a 91% chance of taking the Senate , while control of the House is much closer. Republicans have a 51% chance, while Democrats have a 49% chance, according to 538 . All figures were gathered on Monday morning.

An 80% chance Republicans take the Senate, Democrats 20%

 One of the more influential committees in the Senate is the Senate Banking Committee, which has jurisdiction over the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. Both agencies oversee crypto. Right now, the committee is being led by Sen. Sherrod Brown, D-Ohio, who has been viewed as critical of the crypto industry and is in a tight race in his state against crypto-friendly Republican candidate Bernie Moreno.

If the Senate were to flip Republican, top Sen. Tim Scott, R-S.C., could take the helm of the Senate Banking Committee no matter if Brown wins his race.

Scott, who is currently the top Republican on the Senate committee, has more recently shown support for the crypto industry. In August, he proposed creating a subcommittee focused on the digital asset industry if he became chair. A spokesperson for Scott said the lawmaker plans to work on a framework to regulate digital assets should that happen.

"Senator Scott will work to build a regulatory framework that establishes a reliable pathway for the trading and custody of digital assets that will promote consumer choice, education, and protection and ensure compliance with appropriate Bank Secrecy Act requirements," the spokesperson said in an emailed statement to The Block.

If Scott creates a digital asset-focused subcommittee, it could serve as a "precursor" for future crypto legislation, said Ron Hammond, director of government relations at the Blockchain Association. For example, the House Financial Services Committee has a subcommittee focused on digital assets that has been instrumental in jumpstarting crypto bills.

"We could assume that with that subcommittee, this will be an area where not only the Senate either takes up the House bills, but they could even potentially start their own bills, whether it be stablecoins, market structure, or something different on the AML [anti-money laundering] front," Hammond said in an interview with The Block.

If Democrats hold onto the Senate, Brown would likely remain chair of the Senate Banking Committee. However, if he loses his race and Democrats still hold the majority, there is a chance that Sen. Elizabeth Warren, D-Mass., could become chair. That scenario, though, is unlikely because Ohio is a swing state, so Democrats would have to pick up other states to get control of the Senate.

"There has to be a lot of very unlikely circumstances for Warren to be chair," Hammond said.

Warren has notoriously been critical of crypto, is pushing for the crypto industry to follow anti-money laundering rules, and is behind a bill that would extend Bank Secrecy Act requirements, including know-your-customer rules, to miners, validators and wallet providers.

POSA's Mangiero says she expects more of a willingness from lawmakers in a Republican-led Senate to move forward bills that have already been introduced. Two prominent bills have gained traction in the House — one focused on crypto market structure dubbed FIT21 and another to regulate stablecoins.

As for stablecoins, both Democrats and Republicans have been yearning to get a bill done. On the Senate side, Sen. Bill Hagerty, R-Tenn., introduced draft legislation in October for a bill that closely resembles work being done in the House.

"If we have a Republican-led Senate, the chances are just better that that gets done," Mangiero said in an interview with The Block. "But stablecoins are one of these issues where I really think Democrats are willing to play ball."

As for chances for a market structure-type bill to regulate crypto in a Democrat-led Senate, Mangiero said, "Anything is possible."

A 53% chance Democrats take the House, Republicans close behind

The House Financial Services Committee has been at the crux of crypto-related bills being introduced, and some passed over the past few years under its chair, Rep. Patrick McHenry, R-N.C. McHenry is set to retire in January 2025, leaving a space open for a new lead.

McHenry was pivotal in leading efforts for both a stablecoin bill and FIT21. McHenry said in September that he thinks his bill could gain momentum during the lame-duck session, the time period after the election and before a new Congress steps in in January.

Whichever party wins the White House will likely win the House as well, Hammond said. A House Financial Services Committee chair will also likely be picked by November or December, he added. Names being thrown to lead the committee if Republicans have control include Reps. French Hill of Arkansas, Andy Barr of Kentucky, Bill Huizenga of Michigan and Frank Lucas of Oklahoma — all friendly toward crypto.

"Regardless of who's chair on the Republican side, it's going to be focused on stablecoins, if it doesn't get done by the end of this year, and market structure, and then, likely DeFi, NFTs toward the 2026 timeframe of their tenure," Hammond said.

If Democrats take the House, Rep. Maxine Waters of California could once again lead the House Financial Services Committee. Waters, who has sometimes been critical of crypto, has also been very open to getting a stablecoin bill across the finish line. During a congressional hearing in September, Waters called for a "grand bargain on stablecoins" before the end of the year.

"I've made a public statement to you about bipartisanship — let's see what you do with it," Waters told McHenry during that hearing.

"So if that doesn't get done this year, it is very likely she will pick up where she left off," Hammond said. Waters did not respond to a request for comment from The Block asking about what her priorities for crypto would be if she chairs the committee.

However, Waters was against FIT21, so the pathway for that specific bill is unclear, Hammond said, but he added that it is up to whether Waters believes a regulatory framework is needed for digital assets.

The White House has said it opposed FIT21 but said it was "eager to work with Congress to ensure a comprehensive and balanced regulatory framework for digital assets" in a statement released in May. Meanwhile, SEC Chair Gary Gensler has said that new rules are unnecessary for crypto and has called on crypto entities to register and follow its rules.

Taxes will also come up in 2025 as lawmakers face a deadline when Trump's Tax Cuts and Jobs Act expires at the end of next year, Hammond said.

"When there is a big tax bill on Capitol Hill, it's an open season for tax as a whole," Hammond said, adding that crypto tax proposals will come up in discussions. For example, part of that discussion could include a bill introduced by Reps. Wiley Nickel, D-N.C. and Drew Ferguson, R-Ga., would clarify that staking rewards should only be taxed at the time of sale.

Specific elections to be on the lookout for

Hammond said the Senate race in Ohio will likely be the most significant. Another contentious race could be the Senate race in Montana. There, Democrat Sen. Jon Tester is facing off against Republican Tim Sheehy. Stand With Crypto gave Sheey an A for his friendliness toward crypto, while Tester received a C.

Notably, Tester was one of a handful of Democrats, including Senate Majority Leader Chuck Schumer, D-N.Y.,  to overturn an SEC bulletin establishing certain accounting standards for firms that custody crypto.

Overall, Hammond said that after talking with candidates nationwide, many appear friendly toward crypto.

"The good thing is that there's a lot of races that have pro-crypto Democrats, pro-crypto Republicans," Hammond added. For example, in Arizona's Senate race, Republican candidate Kari Lake and Democrat Ruben Gallego both received an A grade from Stand With Crypto. Fairshake has given millions to Gallego for his race, according to news reports.

POSA's Mangiero elaborated on next year being the "most pro-crypto Congress ever." That will include people who identify as pro-crypto, she said, but also means future lawmakers could be more open-minded.

"I also think you're going to have people who are at least a little bit more open-minded because they are going to have to be educated on these topics in order to govern effectively," she said.