(Bloomberg) -- Crypto billionaires and their allies have amassed a $160 million war chest to protect their fortunes by bolstering US candidates who favor light-touch regulation of the embattled industry.

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The staggering sum makes the crypto industry one of the most influential players in federal campaign finance. It’s the kind of money that’s already proven it can roil a California Senate race. In November, it could be pivotal in handing the Senate majority to Republicans.

Democratic control of the Senate hinges on the reelection of Banking Chairman Sherrod Brown of Ohio and Jon Tester of Montana, both cryptocurrency skeptics with tremendous sway over the fate of the crypto titans’ main legislative goals. They’re also the only two Democratic incumbents running this year in states Donald Trump won in the last election, making them prime targets for Republicans.

Fairshake, the crypto industry’s political action committee, and allied groups have nearly doubled their funding in just the past few weeks after getting $25 million each from Ripple Labs, venture capital firm Andreessen Horowitz, and Coinbase Global Inc. The billionaire twins Cameron Winklevoss and Tyler Winklevoss, who co-founded crypto exchange Gemini, contributed $4.9 million earlier this year.

Coinbase CEO Brian Armstrong, whose estimated net worth soared 50% so far this year with the resurgent crypto market to $10.8 billion as of Thursday, last week urged followers to vote out lawmakers in either party who don’t support digital assets. This week, Armstrong went to Capitol Hill to meet with more than a dozen senators in both parties. That list included Tester, who said afterward he wants to talk to other senators about a crypto regulation bill.

Faryar Shirzad, the chief policy officer for Coinbase, said the company doesn’t control Fairshake and gave to the PAC to promote the industry’s agenda in elections.

“We’ve learned as an industry that you have to show up politically to be heard,” he said. “We’re very, very committed to see that though. We’re very committed to this cycle and beyond. This is only the beginning of a long road.”

Regulatory Goals

Crypto giants want to reduce oversight by the Securities and Exchange Commission, which has sued many major crypto players and imposed hefty fines. Gary Gensler, the agency’s chair, has said the industry is riddled with fraud and that exchanges don’t properly safeguard their customers’ assets and often mix them with their own funds.

Platforms like Coinbase, which the SEC sued last year for allegedly violating securities laws, have a lot to lose if the regulator’s position holds. The SEC claims Coinbase has made billions of dollars illegally promoting the sale of securities, and has also failed to register, as required, as an exchange, a broker and a clearing agency.

Fairshake spokesman Josh Vlasto said this week the super PAC is eyeing both Brown’s and Tester’s reelection races, though it hasn’t committed spending on either race. Earlier this year, Kristin Smith, chief executive officer of crypto trade group Blockchain Association, said the industry would be watching how Brown handles crypto’s legislative agenda.

The Democratic-led Senate so far hasn’t acted on the industry-friendly regulation package, which the Republican-controlled House approved in May.

Michigan Democratic Senator Debbie Stabenow, who also met with Armstrong this week, said she’s working with senators on legislation to govern regulation of crypto assets by the Commodities Futures Trading Commission, crypto’s preferred regulator.

Majority Leader Chuck Schumer supports that effort, calling it “reasonable regulation.”

Heavy Spending

Fairshake spent $10 million ahead of California’s March open Senate primary to pummel progressive Representative Katie Porter, a Democratic crypto-skeptic, with negative ads ahead of her defeat. One television spot called the congresswoman a fake and an accomplished actor while the words bully, liar and unfit flashed across the screen. The ads didn’t mention crypto.

The high-visibility election influence campaign is a remarkable evolution from a year ago, when the crypto industry was reeling from a barrage of scandals and business failures, including exchange giant FTX’s implosion in late 2022.

FTX’s former chief executive Sam Bankman-Fried built significant political influence in Washington with tens of millions of dollars in donations during the 2022 election. He was convicted of a range of crimes related to his management of FTX and sentenced in March to 25 years in prison.

The fallout from his political donations continues. Just last month, a federal judge sentenced one of his top deputies to more than seven years in prison for making millions in political donations while at FTX, drawing on loans from Alameda Research and acting as a straw donor for Bankman-Fried.

The crypto market rebounded this year thanks in large part to the approval by US regulators in January of spot Bitcoin exchange-traded funds, drawing more investors to the most widely held cryptocurrency.

Choosing Sides

Armstrong recently touted a crypto advocacy website, which gave Brown an “F” grade and recommended Brown’s Republican opponent, Bernie Moreno, a longtime crypto advocate who founded a blockchain-based titling company. The website gives Tester a middling “C.”

Brown and Tester are feeling the pressure. Both senators bristled last week when asked about the issue, with Brown repeatedly saying he’s done enough talking to reporters about crypto and won’t negotiate in the press.

Tester, a frequent ally of the banking industry, said he’s stayed fairly neutral on crypto. “When I fully understand it, then we’ll deal with it,” he said.

Moreno, meanwhile, has courted the industry with his crypto experience. “I’m up against the most anti-crypto guy in America,” he said at a recent CoinDesk conference in Austin, Texas.

Tester’s Republican opponent, Tim Sheehy, blasted the Montana senator in posts on X, accusing Tester of trying to kill crypto. Sheehy called Bitcoin and cash “FREEDOM money.”

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