Crypto’s $176M midterm bid meets a $1.9B prediction-market gamble

US midterm voting could reshape Congress and the path for cryptocurrency regulation as crypto-aligned groups spend approximately $176 million across more than 100 races, according to Reuters. Republicans enter Tuesday’s election controlling 53 Senate seats and 219 House seats; Democrats are seeking a net gain of four Senate seats and three House seats to take control of the respective chambers. Nearly $1.9 billion in election-related contracts had traded on Kalshi and Polymarket as of Monday, with both markets favoring a Democratic sweep, according to The Washington Post.

The outcome could determine the prospects for the stalled CLARITY Act, which would divide oversight of crypto markets between the Securities and Exchange Commission and the Commodity Futures Trading Commission while establishing rules for intermediaries. The Senate failed to advance the legislation in a 49–50 procedural vote on Sept. 15, short of the 60 votes required. Republican sponsors said their final draft incorporated substantial ethics concessions sought by Democrats, while Democratic Sen. Mark Warner cited insufficient safeguards against Trump profiting from his administration’s crypto policies.

Crypto spending is concentrated in several closely watched races. In Ohio, where Republican Sen. Jon Husted faces Democrat Sherrod Brown, Defend American Jobs allocated 54% of its total expenses, including $36.9 million supporting Husted and $19.7 million opposing Brown, according to the group’s official website. Fairshake-backed groups have also spent nearly $11 million supporting Republican Sen. Pete Ricketts in Nebraska, while the Winklevoss-backed Digital Freedom Fund has supported Republican Ken Paxton in Texas against Democrat James Talarico. In Maine, prediction markets favor Democrat Troy Jackson over Republican Sen. Susan Collins, one of four Republicans who voted against advancing the CLARITY Act in September.

Maylea Ma, deputy general counsel at 1inch, said “real movement” in US digital-asset regulation over the next few years will come from the Securities and Exchange Commission, Commodity Futures Trading Commission and Treasury, rather than Congress. The SEC proposed a crypto fundraising framework in August and updated staff guidance in September covering token buybacks, crypto networks and staking receipt tokens; the CFTC submitted a crypto market regulatory plan for White House review on Sept. 17. Michael Ho, co-founder of D3, the team behind Doma Protocol, said “Whatever the result, clear rules written into law are what will bring institutional capital into tokenized real-world assets.” Kalshi CEO Tarek Mansour cautioned that “a 5% probability doesn’t mean it won’t happen,” according to CNBC.