Key Takeaways
Two crypto-backed challengers in Texas congressional runoffs received a more than $8.3 million boost from industry-aligned political action committees, part of a larger push to influence policy by unseating incumbents. The spending targets Tuesday's Democratic and Republican primary runoffs for the US House and Senate.
According to Federal Election Commission (FEC) filings, the spending is heavily concentrated in two key races. "The data shows a clear financial intervention aimed at shaping the future of digital asset regulation," Diana Chen, a policy analyst at Edgen, said. "This level of spending in primary runoffs is a significant escalation of the industry's political engagement."
The bulk of the funds, over $7.8 million, came from Protect Progress PAC to support challenger Christian Menefee and oppose incumbent Rep. Al Green in the 18th congressional district. In the Senate race, the Fellowship PAC spent $500,000 to support Attorney General Ken Paxton against incumbent Sen. John Cornyn. Prediction markets on Kalshi gave the crypto-backed challengers, Menefee and Paxton, a 91% and 96% chance of winning their respective nominations.
The outcome of these runoffs could determine the makeup of Congress in 2027 and directly impact which crypto-related legislation, such as the recent GENIUS Act passed by the Republican-led House, moves forward.
In the Democratic runoff for Texas’ 18th district, the race has pitted Rep. Al Green’s decades of experience against Christian Menefee’s call for a new generation of leadership. Despite the massive influx of crypto-related funding, ads paid for by Protect Progress did not focus on digital assets. Instead, they highlighted other political issues, such as Green's opposition to former President Donald Trump. This tactic aligns with a broader trend where candidates receiving crypto funding often avoid mentioning the industry on their campaign platforms.
The Republican Senate runoff has been characterized as a "$109 million slug fest" of advertising, according to a former Texas GOP official. While pro-Cornyn groups have outspent Paxton's, the challenger gained a crucial endorsement from Donald Trump. The Fellowship PAC's $500,000 expenditure came just a day after Trump's endorsement, with ads from Paxton's campaign quickly pivoting to feature the former president's support.
The spending in Texas is not an isolated event but part of a national strategy by the crypto industry to build a "powerful bipartisan mandate." Crypto PACs have spent nearly $2 million more opposing Democrats than supporting them in the current cycle, according to data from Follow the Crypto.
However, the effectiveness of this spending as a campaign issue remains uncertain. In other state primaries, such as in Georgia and Alabama, candidates who received millions in crypto-backing, like Jasmine Clark and Barry Moore, made no mention of digital assets on their campaign websites. The strategy appears to be less about making crypto a public campaign issue and more about ensuring crypto-friendly candidates are on the ballot in November, regardless of party.
This article is for informational purposes only and does not constitute investment advice.
