Crypto enters primary season with Ohio victories

The crypto industry is a big winner in this week's Ohio Senate primary.

J.D. Vance, the Republican nominee, and Rep. Tim Ryan, the Democratic nominee, emerged victorious Tuesday after they and their opponents took pains to present themselves as the type of lawmaker who’d prefer a lighter touch when it comes to digital asset regulation.

“Both Ohio primaries gave us a hard time in terms of ironing out our endorsement strategy and process because of the fact that there are so many kinds of crypto-friendly voices,” said Tyler Whirty, founder of the pro-crypto political action committee HODLpac, which endorsed Ryan and Republican state Treasurer Josh Mandel. “It's a good position to be in.”

It bodes well for cryptocurrency startups that are increasingly flexing their muscles around Washington and the campaign trail. It shows that policymakers from both sides of the aisle increasingly see digital currency firms and users as an important constituency.

Vance, a Donald Trump-endorsed venture capitalist, positioned himself as a digital currency ally during his campaign, as he called for big tech companies to be broken up. He criticized a provision from last year's Biden infrastructure law that imposed tax reporting requirements on crypto firms and said crypto was taking off in part because of concerns that governments could cut off individuals' banking access "if you have the wrong politics."

Mandel, a self-described Bitcoin maximalist, also characterized digital currency as a hedge against the federal government’s power. Republican state Sen. Matt Dolan, another candidate in the GOP primary, has been a proponent as well, having shepherded through bill language to allow Ohio businesses to keep records using blockchains.

Ryan secured the Democratic nomination after co-sponsoring legislation with likely incoming House Financial Services Chair Patrick McHenry (R-N.C.) that would try to scale back the crypto tax reporting provision from the 2021 infrastructure law.

“We have to figure out how to balance consumer protections and reasonable oversight while simultaneously providing these technologies and companies with the necessary space they need to grow, innovate and democratize the financial sector,” Ryan said of the bill, framing the legislation as a necessary step for bringing offshore crypto businesses into the good graces of U.S. regulators.

Ryan's stance is notable as other senior Democrats such as Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio) criticize crypto as a growing financial risk.

Ryan's progressive opponent Morgan Harper — a former senior adviser at the Consumer Financial Protection Bureau — also struck a crypto-friendly tone during her campaign.

Harper leaned heavily into those positions with appearances in industry-friendly publications and podcasts where she touted the asset class’ potential as a way to build access to financial services among underrepresented communities.

“One of the greatest problems in our society is too much power centralized in too few hands, which produces anticompetitive effects that entrench incumbents and prevent innovation,” she told Bitcoin Magazine, adding that she’s “mostly focused on Bitcoin and its potential to disintermediate banks and to serve as a store of value.”