Trump has suffered a crushing defeat. Is the scenario the crypto industry has long feared finally coming to pass?
Written by KarenZ, Foresight News
If the 2024 U.S. general election gave the crypto industry a glimpse of the potential for political investment to translate into policy wins, the 2026 midterm elections have delivered an unexpected reversal.
Two years ago, the crypto industry poured massive funding to support pro-crypto candidates, with Trump vowing to make the U.S. the global hub of cryptocurrency. In the period since, the GENIUS Act was signed into law, the administration pushed forward regulatory reforms, and the industry’s anticipation for policy dividends continued to rise.
Yet just two years later, the power dynamic in Washington has shifted dramatically.
On November 4, according to reports from the Associated Press, the Democrats not only reclaimed the House of Representatives but also secured a majority in the Senate during the U.S. midterm elections, achieving unified control of both chambers of Congress. Trump’s legislative agenda for the next two years will face far stiffer resistance.
For the crypto industry, the election result in Ohio is particularly dramatic: Sherrod Brown, who was heavily targeted by crypto political spending and lost his re-election bid in 2024, has now defeated Republican Senator Jon Husted to return to the Senate.
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Meanwhile, Elizabeth Warren, a long-time critic of the crypto industry, is well-positioned to become the next chair of the Senate Banking Committee, a role that will allow her to shape the agenda for financial regulatory legislation.
That said, there are also a number of Democratic lawmakers who support the GENIUS Act, the CLARITY Act, and digital asset market structure legislation. The pressing new question is: can the cross-party support the industry has built in past years translate into the votes required for the next round of legislative push?
Will Pro-Crypto Democrats Still Vote in Favor of Industry Legislation?
To assess how the Democrats will shape crypto policy, it is helpful to first review how lawmakers have voted on relevant measures in the past.
In June 2025, the GENIUS Act, a stablecoin regulatory bill, passed the Senate with 68 votes in favor and 30 against, including votes from 18 Democratic lawmakers. In July of the same year, the CLARITY Act, a crypto market structure bill, passed the House with a vote of 294 to 134, with 78 of the supporting votes coming from Democrats.
This means the support the industry has secured already extends across partisan lines.
New York Democratic Senator Kirsten Gillibrand, a key Democratic lawmaker behind the GENIUS Act, first partnered with Republican Senator Cynthia Lummis back in 2022 to introduce the bipartisan Lummis-Gillibrand Responsible Financial Innovation Act.
Angela Alsobrooks, another Democratic Senator from Maryland, was also directly involved in negotiations for stablecoin legislation. A co-sponsor of the early versions of the GENIUS Act, she noted after the bill was signed into law that she had negotiated to include provisions preserving state consumer protection laws and shielding the interests of community banks. She supports establishing a regulatory framework for stablecoins, but insists that consumer protection and the interests of the traditional banking system must be accounted for in the process.
Her focus on protecting banking interests has carried over to subsequent negotiations. According to a report from Forbes reposted by her office, in May 2026, she reached a compromise with Republican Senator Thom Tillis on the stablecoin yield provisions in the CLARITY Act. The proposed deal would ban rewards that are economically or functionally equivalent to interest on bank deposits, while leaving room for legitimate rewards tied to genuine platform activity for eligible users. This compromise remains part of ongoing legislative negotiations and cannot be treated as an enacted ban.
These lawmakers are willing to support innovation, but they will also demand that legislation account for the interests of consumers and the traditional banking system. Supporting crypto legislation does not mean accepting every demand put forward by the industry.
In this election, Georgia Senator Jon Ossoff and Virginia Senator Mark Warner, both of whom voted for the GENIUS Act, won re-election. Among the newly elected lawmakers, Republicans Andy Barr and Harriet Hageman have previously supported relevant industry bills, while Democrats James Talarico and Troy Jackson have also publicly backed clear regulatory frameworks for crypto.
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The stance of re-elected Virginia Senator Mark Warner offers a clear illustration of the conditions attached to Democratic lawmakers’ support for crypto legislation.
On May 8, 2025, he argued that the text of the GENIUS Act was not yet finalized and that rushing to advance it would be unwise. By May 19, he threw his support behind the revised version, noting that while the bill was imperfect, it was a marked improvement over the status quo. Notably, in the very same statement announcing his support, he issued sharp criticism of the Trump family’s crypto-related business ventures.
As negotiations on the CLARITY Act progressed, he remained committed to advancing the legislation. A July 2026 Forbes opinion column cited his remarks at a hearing, in which he said he had “had enough of crypto hell” — expressing a desire for the U.S. to lead global digital asset development, while voicing concern over the potential fallout from poorly drafted regulatory rules.
Yet on September 15, Warner voted against the procedural motion to advance the CLARITY Act. He explained that while negotiations on issues such as enforcement and national security were close to a breakthrough, the unresolved conflict of interest tied to the President’s personal holdings remained a sticking point: because government policy could directly impact the value of the President’s own crypto assets, it was necessary to include legally enforceable ethics provisions in the bill.
Despite voting against that version of the bill, Warner signaled he remained open to continuing negotiations. On September 16, he, along with Gillibrand, Alsobrooks, Gallego and three other Democratic senators, issued a joint statement framing the failed procedural vote as a setback in the legislative process. The group reaffirmed their commitment to pursuing bipartisan negotiations to pass crypto legislation that includes provisions for consumer protection, enforcement against illicit activity, and guardrails on conflicts of interest for elected officials.
Judging by these public stances, supporting the establishment of a regulatory framework is only the starting point of negotiations. The level of regulatory certainty afforded to industry players, and the degree to which officials’ personal financial interests are constrained, will ultimately determine whether a lawmaker casts a vote in favor.
With the Democrats in control of Congress, these types of disputes are far more likely to be placed on the agenda for hearings and investigations. Congress holds the authority to oversee the executive branch and investigate commercial activity, and can compel relevant parties to explain the connections between policy decisions and private commercial interests.
As a result, crypto businesses with closer ties to the President’s personal commercial interests may face mounting pressure from conflict-of-interest reviews in the coming period. According to a report from Fortune, after Democrats reclaimed control of Congress, WLFI is likely to be the first entity targeted in investigations into the Trump family’s crypto-related business ventures.
Elizabeth Warren Is Poised to Lead the Senate Banking Committee
If Warner’s stance highlights the conditions required to win over a subset of Democratic lawmakers, Elizabeth Warren’s potential ascension to lead the committee means these requirements have a far greater chance of directly shaping legislative agendas.
Currently, Elizabeth Warren is the Ranking Member of the Senate Banking Committee, serving as the top Democratic lawmaker on the panel. With the Democrats winning majority control, she is widely considered the frontrunner to take on the role of committee chair.
The power of the committee chair lies in their ability to shape what topics the committee deliberates, what entities it investigates, and under what terms a bill can move forward in the legislative process. Even if the industry retains a base of supportive lawmakers, it cannot afford to ignore the shift in who holds agenda-setting power.
Elizabeth Warren holds a hardline regulatory stance toward the crypto industry. Her core concern is that crypto firms leverage the label of “financial innovation” to gain policy approval, while bearing far less accountability than traditional financial institutions. In 2025, she outlined five core principles that crypto market structure legislation should follow: upholding securities law, protecting investors, safeguarding financial stability, enforcing anti-money laundering and sanctions compliance requirements, and preventing public officials — including the President — from profiting off crypto assets.
These requirements are also reflected in her position on specific pieces of legislation. During debates over the GENIUS Act, she argued that the then-drafted version contained critical gaps in consumer protection, financial stability, national security, and checks on presidential conflicts of interest, and pushed for revisions before moving the bill forward. In her view, if legislation expands the stablecoin market without putting sufficient guardrails in place, the law itself could end up amplifying systemic risk.
Ahead of the September 2026 procedural vote on the CLARITY Act, she again opposed advancing the existing version of the bill. Her criticism touched both on Trump’s personal crypto-related financial interests and broader regulatory concerns: she warned that crypto firms could use on-chain asset structures to evade securities law, banks could expand their exposure to high-risk crypto activities, and law enforcement capacity to crack down on illicit financial activity could be weakened.
As a result, if Warren takes on the role of Senate Banking Committee chair, the industry can expect to face stricter compliance and conflict-of-interest requirements as it seeks regulatory certainty. Based on her public positions, whether a bill strengthens regulatory guardrails will be the key factor to winning her support.
What Should the Crypto Industry Reassess?
The new cohort of lawmakers will take office in January 2027. While the election has reshaped the composition of future Congresses, Trump remains the incumbent president, and the executive branch will not automatically turn over simply because partisan control of Congress has shifted.
Democrats will have the power to shape legislation, appropriations, oversight, and the confirmation of nominees requiring Senate approval, but holding a majority alone will not allow them to take direct control over the day-to-day decision-making of regulatory agencies.
As a result, the impacts of the new political landscape will likely unfold in tiers. Stablecoin issuers, payment firms, and banks will first need to adapt to existing laws and implementing rules; trading platforms and token issuance projects waiting for market structure legislation will continue to bear the cost of unclear regulatory boundaries; and businesses highly reliant on Trump’s personal political influence will face far closer scrutiny of their political connections.
Trump’s loss of control of Congress delivers a clear lesson for the crypto industry: a president can open the door for an industry, but the rules for moving through that door must still be drafted line by line by Congress and regulatory agencies.
Going forward, the most critical point to watch is under what conditions those lawmakers who previously voted in favor of crypto legislation will be willing to cast a supporting vote once again.