Above the Seat: A Power Struggle Deciding Crypto Fate

Written by: David Christopher

Translated by: Saoirse, Foresight News

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What hidden risks does the midterm election pose to the crypto industry? As the Democrats’ chances of sweeping both houses of Congress continue to rise, I want to analyze their potential impact on the future of the crypto industry based on current polls.

To do this, I have referenced prediction markets and reviewed materials like Stand with Crypto (SWC, Support Crypto Alliance)—a platform that records candidates’ policy positions on crypto. I integrated this information to build an analytical dashboard.

Although the data is still being supplemented and refined, I have established a core database tracking key districts where Democratic candidates lead, linking their crypto policy stances with the potential influence of congressional committees. This preliminary analysis reveals the policy landscape in the coming months: on the surface, there appears to be room for cooperation, but deeper analysis uncovers fundamental structural issues.

Unexpected Reality

First, it’s important to clarify that support for the crypto industry among Democrats is actually higher than generally expected—at least on some bills.

In the House, 101 Democratic members (about 48% of the party caucus) supported the GENIUS Act; in the Senate, 18 Democrats (40%) voted to advance the bill to a vote. This seems to form a genuine bipartisan support coalition. However, this support is limited to that specific bill; once it reaches the core decision-making stage—committee review—this support disappears.

This is the crux of the issue.

Sources of Influence

Crypto-related legislation has never been directly voted on by the full Congress.

Whether it’s stablecoin regulation, market structure rules, or the SEC’s jurisdiction, all issues must first go through committee review. The House Financial Services Committee (HFSC) and the Senate Banking Committee are the two main bodies that determine the fate of crypto legislation (market structure bills also require input from the Agriculture Committee regarding CFTC authority).

Committee chairs hold absolute control over the agenda: deciding which bills get hearings, which move to review, and which quietly die in procedural deadlock. Opposing a bill, a chair doesn’t need to veto via vote; simply refusing to schedule it can effectively block it.

In recent years, Republican chairs have demonstrated this power:

Senate Banking Committee Chair Tim Scott pushed the GENIUS Bill through committee review and helped it pass the Senate vote;

Former House Financial Services Committee Chair Patrick McHenry championed the FIT21 Act, making it the first major crypto market structure bill to pass the House;

Current House Financial Services Chair French Hill has continued this momentum, pushing bills like the CLARITY Act through the House (though it remains stalled in the Senate), and holding hearings on digital assets and capital markets modernization.

So, what happens if Democrats win outright?

The majority party will control all committee chairs without exception. If Democrats retake the House, they will control all House committees; if they take the Senate, they will control all Senate committees. Chair positions within the majority are usually assigned based on seniority.

House Financial Services Committee: the most senior Democrat is Maxine Waters;

Senate Banking Committee: the most senior Democrat is Elizabeth Warren.

It’s well known that both oppose all major crypto bills. Warren led opposition during the GENIUS Bill’s review, claiming it “poses a threat to national security”; Waters directly denounced the bill as “a complete crypto scam.”

The key battleground in the House is: when party control shifts, subcommittees will be completely reorganized. The majority party will allocate new members and adjust proportions. Waters will have significant influence over personnel decisions within the House Financial Services Committee and its subcommittees, including who handles “digital assets” issues. While she cannot unilaterally decide all members (party leadership and caucus meetings also have a say), she can steer the committee toward her anti-crypto stance.

Currently, the Democratic camp within the House Financial Services Committee is clearly leaning anti-crypto: Brad Sherman, Stephen Lynch, Emanuel Cleaver, and Sylvia Garcia all hold strong opposition. Even if pro-crypto members like Jim Himes, Bill Foster, Ritchie Torres, Josh Gottheimer, and Vicente Gonzalez are present, they cannot control the agenda during Waters’ chairmanship.

This chart shows the distribution of crypto positions in the two core committees if Democrats regain control in 2026, visually reflecting the regulatory landscape the crypto industry will face.

The situation in the Senate Banking Committee is somewhat better. Although Warren will be chair, the committee’s composition is more diverse: some members support crypto (e.g., Mark Warner, Ruben Gallego, Angela Alsobrooks), some oppose (e.g., Tina Smith), and others are swing votes. A slight positive is that if Democrats control the Senate, Senator Gallego—who is rated neutrally and friendly on SWC—may lead the digital assets subcommittee. While Warren will still control the overall agenda, Gallego could have some space to voice pro-crypto opinions at the subcommittee level.

Key Elections That Will Truly Impact the Landscape

Most Democratic supporters of crypto are not in the House Financial Services or Senate Banking Committees. They can support related bills in full votes or pressure party leadership (but given the high polarization on this issue, most members are reluctant to speak out for crypto). However, they cannot force committee chairs to advance legislation.

Only a few elections can truly change the composition of these committees.

This chart analyzes key districts that influence U.S. crypto legislation, based on average data from Polymarket and Kalshi prediction markets, highlighting which election outcomes will directly alter the crypto stance of the HFSC and Senate Banking Committee.

Final Thoughts on the Midterm Elections

The outlook for the House is extremely grim.

There is an 85% chance that Democrats will retake the House, meaning Waters will likely lead the House Financial Services Committee, with full authority to reorganize subcommittees and set legislative priorities. The few remaining bright spots are: Menefee is likely to defeat Green for a seat, and Gonzalez probably will keep his current seat. These may provide some checks and balances but cannot change the core power—who chairs the committee.

The Senate is the last stronghold for the crypto industry, but the situation worsened last night: Juliana Stratton defeated Raja Krishnamoorthi in Illinois primaries. According to SWC records and the fact that Fairshake (a super PAC with a background in U.S. crypto industry lobbying and one of the most influential political advocacy groups in crypto) spent $7 million opposing her, it’s clear that Stratton is a staunch anti-crypto politician.

What’s even more frustrating is the overall pattern: about 47% of Democratic senators and 37% of Democratic House members support the GENIUS Bill. While pro-crypto Democrats do exist, legislation’s fate is never decided by full votes but by committee attitudes. Committee votes on market structure bills follow strict party lines. The current support cannot influence the core decision-making process that determines legislation’s future.

The crypto industry should not be so partisan. While some Democrats support crypto, they happen not to be in key legislative positions.