The midterm elections in the US are influencing and reshaping the regulatory landscape of the cryptocurrency industry amid the turmoil caused by the collapse of cryptocurrency exchange FTX.

With a clearer outcome to the US midterm election outcome, some analysts predict that the Republicans could retake control of Congress. The changing balance of power and dynamic discourse on power could affect the ongoing regulation of cryptocurrencies and virtual assets.

Throughout the election campaign, many crypto industry leaders and companies try to expand their influence and skills to pressure legislators by offering political donations in favor of their candidates.

According to Reuters, citing data from OpenSecrects, the report revealed that FTX CEO Sam Bankman-Fried, also known as SBF, is very involved in this midterm election and he has donated much more than others in the cryptocurrency industry.

Data shows that Bankman-Fried’s total contribution of approximately $40 million makes it the sixth largest individual donor in the United States. The vast majority of their donations go to Democrats, while less than 0.6% of funds go to Republicans, according to OpenSecrets.

Meanwhile, SBF Deputy Ryan Salame, Co-CEO of FTX Digital Markets, handed out more than $23.6 million to Republicans, including more than $11,000 to support Rep. Alex Monnet of West Virginia. Salame’s total contribution pushed him to the 14th largest individual donor on the list.

However, SBF’s commitments have been questioned along with the latest FTX standoff.

The mid-term result comes amid swinging markets following the collapse of SBF’s FTX crypto exchange, as Chang Peng Zhao announced that Binance would acquire FTX under a non-binding letter of intent. Despite the terms of the deal and no timeline for when the deal might close, the market has seen a new wave of turmoil and volatility amid the crypto winter.

Crypto Bill Regulation Remains Unclear

Some analysts suggest that a Republican-dominated Congress would likely pressure agencies, such as the Securities and Exchange Commission (SEC), which the industry has tasked with regulation through the app, to ease their aggressive stance against crypto companies.

In June, a A bipartisan pair of US senators has introduced a bill that would establish new legal frameworks for cryptocurrencies and hand most of its oversight to the Commodity Futures Trading Commission (CFTC).

The so-called “Crypto Bill” debate is still ongoing in Congress. The bill, if passed, could empower the CFTC, which is considered a more crypto-friendly regulator than the SEC, to oversee the cryptocurrency market.

Among the controversial issues in the regulation of cryptocurrencies, one of the fights would be the definition of “security”, which financial products count as security or raw Materials. Who has the authority, and how to regulate it? All these questions remain unclear.

Previously, the CFTC chairman suggested that he should allow Congress to regulate cryptocurrencies, which is much better than the impasse that remains between the CFTC and the SEC.

Meanwhile, service legal battles between the SEC and virtual asset companies, such as Ripple, are still struggling to find an end. In December 2020, the SEC sued Ripple Labs, claiming that the crypto firm had raised over $1.3 billion by selling XRP in unrecorded security transactions. But Ripple maintained that XRP sales and trading did not meet the Howey Test, a test created by the Supreme Court to determine whether a transaction qualifies as a security.

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