Galaxy Warns Crypto Faces Fresh Scrutiny as Democrats Sweep Congress

Democrats have swept both chambers of Congress, and Galaxy is already warning crypto to brace for a rougher ride in Washington. Projections from Decision Desk HQ confirmed the Democratic wins, setting up divided government when the new session begins in January. Galaxy's election assessment, published Nov. 6, flagged potential congressional scrutiny of Trump-linked crypto businesses as the policy agenda tilts toward tougher oversight.

Alex Thorn, Galaxy's head of firmwide research, laid out the coming lineup. He expects U.S. Senator Elizabeth Warren (D-MA) to take the Senate Banking Committee gavel and Rep. Maxine Waters (D-Calif.) to lead House Financial Services — putting both atop the panels that police financial regulation. For the industry, that's the wrong end of the gavel.

The midterms delivered their sharpest blow in Ohio, where former Senate Banking Committee Chair Sherrod Brown beat U.S. Senator Jon Husted (R-OH). Galaxy called Brown's return the most notable congressional loss for digital asset advocates on the night. The CLARITY Act, the bill meant to build federal operating rules for crypto markets, was already stalled after a Sept. 15 procedural vote to advance it failed 49-50. Ripple Chief Legal Officer Stuart Alderoty responded by pushing for a more coordinated industry policy message.

Galaxy doesn't expect lawmakers to rescue the legislation anytime soon. In its assessment, the firm said it does not expect substantial movement in Congress on key digital assets legislation. Federal agencies, though, can keep writing rules under authority they already hold — the SEC, the CFTC and banking regulators are all in that mix. Over in the House, Democrats are weighing ways to expand Waters' proposed crypto investor and consumer bill of rights into a broader market structure package.

Trump family ventures are squarely in the crosshairs of that scrutiny, including World Liberty Financial, the crypto outfit behind the USD1 dollar-backed stablecoin. Thorn also noted Washington law firms staffing up on lawyers to help clients handle anticipated investigations. Markets wobbled alongside the political shift: bitcoin climbed back above $80,000 before sliding in the broader Nov. 5 sell-off, with tech, AI, data center and crypto stocks all trading lower together. Voters in 10 states rejected data center development in 40 of 41 local ballot measures, Galaxy reported.

Industry leaders responded with olive branches. Ripple CEO Brad Garlinghouse stressed bipartisan wins while calling for clear rules and continued digital asset development in the U.S., and Alderoty said the company wants to work with both parties. Michael Saylor, executive chairman of Strategy Inc. (Nasdaq: MSTR), pointed to bitcoin reserve supporters winning on both sides — Republican Byron Donalds took Florida's governor race after backing a federal bitcoin reserve, and Democrat James Talarico won a Texas Senate seat after supporting his state's reserve legislation. Galaxy also noted the reelections of Democratic Reps. Josh Gottheimer and Ritchie Torres and Republican House Agriculture Committee Chair Glenn Thompson. The industry's record was scattershot: researcher Molly White found crypto and AI PAC-backed candidates lost nine of 12 competitive races called as of Nov. 4, while all 40 industry-backed candidates in safer seats won.