"Democratic Congress win forces crypto to rethink Washington strategy Nov 05, 2026

Democrats won both chambers of Congress, according to the Associated Press, prompting crypto companies and advocacy groups to reconsider how they pursue policy in Washington. The industry spent roughly $200 million on the election, Reuters reported, but the result raises questions about whether campaign spending can deliver durable legislative support. The new Congress convenes January 3.

The Clarity Act faces an immediate reset: its current version expires with this Congress after failing a Senate procedural vote in September, 49-50. Any successor would have to be reintroduced and renegotiated, and the filibuster means Democrats would still need Republican support. The failed vote therefore leaves comprehensive market-structure legislation uncertain, rather than simply ready to advance under the incoming Congress.

The Digital Chamber identified Ohio’s special Senate election as crypto’s most consequential unfavorable result. Sherrod Brown defeated crypto ally John Husted, despite crypto PACs spending more than $63 million opposing Brown. The group said Brown could shape the Democratic caucus’s approach to crypto. It also called Elizabeth Warren the clear favorite to chair Senate Banking, while arguing that a change in political conditions does not eliminate every legislative opening.

Potential areas for narrower progress include tax reporting, custody, and implementation of stablecoin rules, according to the Digital Chamber. House Democrats are also reportedly discussing a broader market-structure bill. Industry leaders said the response should be to build bipartisan relationships rather than rely primarily on campaign spending; the industry may also face scrutiny over its ties to Trump. These possibilities point to a more constrained and politically sensitive path, not a guarantee of agreement.

Arkansas is seeking an injunction, penalties, unpaid taxes, and restitution from Kalshi, alleging that the prediction-market company operated illegal gambling and allowed residents, including people as young as 18, to trade without gambling licenses, restrictions, or taxes. Arkansas is relying on its Deceptive Trade Practices Act. Kalshi argues that its sports contracts are financial derivatives regulated by the CFTC, putting the dispute at the intersection of state gambling laws and federal oversight.

Arkansas joins New York, Michigan, Kentucky, and Utah in court challenges to prediction markets, while the CFTC is suing states to defend its authority. The competing claims leave unresolved whether Kalshi’s sports contracts should be treated as gambling subject to state requirements or as derivatives overseen federally.

American Bitcoin reported third-quarter net income of about $126 million, versus a second-quarter loss of about $57 million, but the swing depended on a $197 million accounting gain on digital assets. Excluding that gain, the company’s operations lost about $5.5 million. Mining revenue was $63 million, while the cost per coin rose to $42,100, separating the reported profit from the results of its mining operations.

Credit Mutual Arquia confirmed a cyberattack through a third-party service provider and said it was trying to recover the money. The bank said the incident did not involve its online arm Fortunayo and put its provisional loss at around 100 million euros. ZachXBT estimated the suspected theft at more than $133 million, including a further $27 million in exchange withdrawals; Bitkery traced about $109 million withdrawn from accounts at Kraken, Crypto.com, and OKX.