The Great Crypto Frustration – Why Silicon Valley is Boiling Over at Congress

Katie Porter learned that a group known as Fairshake was going to spend about ten million dollars attacking her California Senate primary campaign one morning in February 2024 while she was sitting in bed and going through messages from her campaign team. For the duration of her race, Porter had raised thirty million dollars over several years.

She later stated that it seemed nearly unreal that an organization she had never heard of would emerge in the last three weeks and use a third of that amount against her. She looked up the name on Google. What she discovered was a super PAC that was supported by three cryptocurrency companies and functioned according to a logic that was largely unrelated to her own life. Someone familiar with the group’s mindset claimed that Fairshake’s supporters didn’t give a damn about Porter. The message it conveyed to the other viewers was the point.

It wasn’t a subtle message. “If you are pro-crypto, we will help you,” a Fairshake acquaintance told The New Yorker. “And if you are anti, we will tear you apart.” Porter wasn’t on the relevant committee, so she hadn’t even cast a vote on crypto legislation. She was labeled as “very anti-crypto” by a Fairshake-affiliated website because she never cast a vote. That didn’t matter. The ensuing attack advertisements made no mention of cryptocurrency. They falsely claimed she had accepted money from oil and pharmaceutical companies, called her a bully and a liar, and failed to disclose the industry funding that supported their claims. With 15% of the vote, she finished third in the primary.

Not because of what happened to Porter, but rather because of what it showed about Silicon Valley’s decision to interact with Washington, that episode is worth thinking about. The tech industry’s political approach for the majority of the previous 20 years was essentially reactive: it funded candidates who appeared amiable, complained when regulations seemed excessive, and occasionally sent executives to testify before committees where they were photographed appearing somewhat perplexed by the questions.

It seems like that time has passed. More than any other super PAC in the nation, including those endorsing Donald Trump’s reelection, Fairshake and its affiliates raised over $170 million for the 2024 election cycle. Almost half of all corporate contributions to PACs during that cycle came from pro-crypto donors. The industry no longer made polite requests.

One of the reasons the current political situation is so hard to understand is the frustration that has been fueling all of this spending for a number of years. On the one hand, proponents of cryptocurrency contend that politicians who lack knowledge of the technology have been making policy decisions based on ignorance or ideological animosity, and that American regulators have been antagonistic to an industry that could actually modernize the nation’s financial infrastructure.

However, detractors, such as economists and financial policy scholars who have been observing the lobbying surge with growing concern, contend that the industry is actually looking for a government endorsement that shields consumers and investors while shielding cryptocurrency companies from accountability. Particular attention was paid to the GENIUS Act, which would regulate stablecoins. Critics pointed out that issuers with less than ten billion dollars in outstanding stablecoins would only be subject to state regulation, a provision that unnervingly echoes the regulatory gaps that contributed to several financial crises dating back decades.

It’s possible that both of these statements are true at the same time: that there is some justifiable dissatisfaction with American regulatory inconsistency, and that the industry is using that dissatisfaction as a pretext for a political endeavor that primarily benefits its own financial interests. Industries rarely spend hundreds of millions of dollars out of pure civic principle, and the history of financial lobbying in Washington indicates that the two are not mutually exclusive.

When Silicon Valley Bank collapsed in the spring of 2023 — a bank closely connected to many of the same venture capitalists now funding pro-crypto PACs — the federal government spent roughly twenty billion dollars on the bailout. The bank’s leadership had apparently not adequately considered that bond values fall when interest rates rise. It is worth keeping that episode in mind when assessing the industry’s claims about financial sophistication.

There’s a feeling, watching this unfold from a distance, that what Silicon Valley has really lost patience with is the pace of Washington rather than any specific policy position. The tech industry operates on quarterly cycles at the slowest; Congress operates on generational ones. Venture capitalists who raised funds in 2021 on the promise of crypto infrastructure buildout are now, in 2025, still waiting for regulatory clarity that would let those bets pay off. The annoyance is genuine. It’s still genuinely unclear if it’s being used constructively or if it’s just buying the appearance of certainty in a system that tends to oppose that specific purchase.

What is clear is that the old Washington dynamic — where tech wrote the op-eds and the think tanks did the lobbying and the politicians quietly did whatever they were going to do anyway — has broken down. The industry made the decision that it desired a place at the table. It purchased one. In one way or another, the next few legislative sessions will likely provide an answer to the question of whether it knows what to order once it sits down.