Crypto lobby targets SEC’s Crenshaw ahead of Senate committee vote

The crypto industry is mounting a vigorous effort to block the renomination of Securities and Exchange Commissioner Caroline Crenshaw as the Senate Banking Committee gears up to vote for her appointment to a second term at Wall Street’s top regulator.

Crenshaw, a Democrat, was appointed to the commission in 2020 by then-President Trump, and renominated by Biden. If voted through on Wednesday morning by the Banking Committee and then confirmed by the full Senate, she’ll be eligible to serve on the commission through June 2029.

The anti-Crenshaw lobbying is taking place publicly on social media with top crypto executives denouncing Crenshaw’s alleged anti-crypto record, warning there will be future political repercussions if lawmakers vote to confirm her. A coordinated digital and mobile ad campaign has been launched around the Washington D.C. area and industry advocacy groups are sending letters to Senate Banking leadership expressing opposition to her reconfirmation.

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With just eight days before Congress adjourns for the year, Republicans say the scheduling of Crenshaw’s vote Wednesday at 9:45am EDT is a last-minute effort by Democrats to try and undermine the mandate voters gave Trump and Congress to restore the SEC to a pro-innovation, pro-business agenda that includes establishing a regulatory framework for digital assets. Republicans will be in the minority until the start of the next Congress in January.

“This 11th hour push by Democrats to ram through President Biden’s nominees is a blatant attempt to hinder President Trump’s agenda,” Tim Scott, the South Carolina Republican and the committee’s ranking member, said in a statement.

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At issue for crypto investors has been Crenshaw’s support of SEC chairman Gary Gensler’s stringent oversight of the $3 trillion digital asset industry. They also oppose her for the characterization of the crypto markets as ‘petri dishes of fraudulent conduct,’ and her dissent from the commission’s approval of Wall Street’s bitcoin spot exchange-traded funds. 

“Caroline Crenshaw was a failure as an SEC Commissioner and should be voted out,” said Coinbase CEO Brian Armstrong in a post to his X account on Friday evening. “She tried to block the Bitcoin ETFs and was worse than Gensler on some issues (which I didn’t think was possible).”

In the same post, Armstrong said the crypto community would closely monitor the Senate Banking Committee’s vote, adding that support for Crenshaw could negatively impact senators’ ratings on the closely watched Stand with Crypto ratings scale, a service created by the Coinbase-affiliated advocacy group that grades politicians on their support for crypto-friendly legislation.

Such ratings have been politically consequential in the 2024 election cycle as the crypto industry’s political clout has grown with the massive run-up in the value of digital assets over the past year that provided seed money for campaign contributions. A high rating has correlated with more campaign cash flowing to various candidates from crypto super PACs such as Fairshake, while low ratings often translated to PACs spending money on attack ads opposing anti-crypto candidates or endorsing their opponents.

For example, Democratic Ohio Senator Sherrod Brown was a target of the crypto industry’s political spending when Fairshake spent $40 million in support of his Republican opponent, Bernie Moreno. Moreno successfully unseated Brown, who has held the seat since 2007.

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Meanwhile, the non-profit Cedar Innovation Foundation, an industry-backed group that advocates for the advancement of crypto and blockchain technology, launched on Monday a five-figure mobile ad campaign in DC and across social media platforms calling Crenshaw “more anti-crypto than Gensler,” pointing to her opposition of the bitcoin ETFs that Gensler voted to approve.

On Monday, CEOs of industry trade groups Blockchain Association and DeFi Education Fund penned a joint letter to Senate Banking leadership opposing Crenshaw’s reconfirmation. 

“Congress has a clear mandate from the American people to establish sound and reasonable cryptocurrency-related policies,” they wrote. “Unfortunately, Commissioner Crenshaw’s tenure at the SEC has been marked by actions that seem to be at odds with this charge.” 

Crenshaw’s alignment with Gensler on progressive regulatory initiatives such as the climate disclosure rule, which aimed to force public companies to disclose metrics on their carbon footprints, has also caused friction with Republican lawmakers who say the agency under Gensler has overstepped its congressional mandate by venturing into social issues like climate change.

It’s unclear how effective crypto’s lobbying effort will be in blocking Crenshaw’s nomination. If all Democratic members of the Senate Banking Committee show up and vote in her favor Wednesday morning, they will have the majority needed to pass her through to a full Senate vote.

Chuck Schumer, the New York Democrat who will relinquish his role of Senate Majority Leader to South Dakota’s John Thune next year could then hold a full Senate vote for Crenshaw next week amidst finalizing the continuing resolution to keep the government funded, the $895 billion defense spending bill, as well as voting on a host of Biden’s judicial nominees, senate sources tell Fox Business.

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Given all that’s on the table, it’s unclear if Schumer will prioritize a vote on Crenshaw’s term extension even if she makes it out of committee, these sources add.

A press rep for Schumer had no immediate comment.