As the Senate was nearing the finish line on its massive infrastructure bill last week, the very online and very intense world of cryptocurrency was looking to Capitol Hill and getting antsy.
In order to pay for a $1 trillion investment in roads, railways and utilities infrastructure, the bill offered new rules governing how owners of digital assets like Bitcoin and Ethereum report the value of their holdings to the IRS—a change projected to bring in an additional $28 billion in federal tax revenue.
Crypto industry advocates and data privacy hawks, however, saw the changes as nightmarish. They argued the broadly written legislation would prove a burden on the nascent industry by imposing tough reporting requirements on third-party developers who make the system hum, while endangering their privacy.
Under the law, so-called crypto miners—people who harness computing power and copious electricity to put coins into circulation—would be classified as “brokers.” That means that someone mining cryptocurrencies would be subject to onerous tax forms to the IRS, and it would make it harder across the board for people buying and selling crypto to evade taxes.
Many of the millions of people who own Bitcoin or other cryptocurrencies tend to be apolitical—or selectively political with niche fixations. It’s a fitting stance for people looking to limit government influence over currency, adopt cutting-edge technologies, or just make a quick buck.
But during this latest policy battle on Capitol Hill, crypto fans had an unlikely ally: a libertarian conservative-turned-MAGA hardiner, Sen. Cynthia Lummis (R-WY).
As the infrastructure bill moved forward, Lummis, who owns roughly $230,000 worth of Bitcoin and has been a crypto evangelist for years, partnered with two established fiscal wonks—Sens. Ron Wyden (D-OR) and Pat Toomey (R-PA)—to craft an amendment intended to protect the third-party crypto ecosystem.
Lummis tapped into the online crypto community to build support inside the Capitol, tweeting updates multiple times a day and encouraging users to call their senators. She approvingly retweeted a meme of Paul Revere—bearing laser-shooting eyes, a crypto subculture signature that Lummis herself adopted in February—warning of the imminent danger and urging action.
“Every call, tweet and email helps,” Lummis tweeted on Aug. 6. “I know many of you aren’t all that political so thank you for coming out of your comfort zone to advocate for the future.”
Even though Lummis and her counterparts came to a compromise agreement with the lead authors of the overall infrastructure bill, the amendment was blocked by Sen. Richard Shelby (R-AL) over an unrelated issue, and the push fizzled.
“While we ultimately failed to get our amendment into the infrastructure bill, this fight has a silver lining: Congress is awake to the digital asset community, and the digital asset community is beginning to organize,” said Lummis, in a statement to The Daily Beast. Her office did not make her available for an interview.
Lummis’ assessment is not wrong, and in the process, she earned the admiration—and passionate fandom—of that community, from industry leaders to lowly boosters who buzzed about wanting the first-year senator to run for president in 2024. It’s a vindication not only of her policy work but a steady, savvy cultivation of crypto fans.
“I can’t speak more highly of her,” Ben Weiss, co-founder and CEO of Bitcoin ATM company CoinFlip, told The Daily Beast.
“I’m impressed with Sen. Lummis!” tweeted Gene Simmons, the former KISS frontman and prominent crypto fan. “Well done.”
This is not the road that many expected Lummis, the first member of the hard-right House Freedom Caucus to be elected to the Senate, to take upon entering office.
Indeed, her first major act after being sworn in this January was objecting to the counting of Pennsylvania’s electoral votes for Joe Biden, hours after a mob of pro-Trump rioters ransacked the Capitol. In the lead-up to Jan. 6, Lummis bolstered the Trump election-fraud claims that culminated in the Capitol attack.
In the months since, Lummis has proved a staunch GOP partisan on most issues. But crypto policy scrambles partisan lines, and the senator’s largely quiet work on the issue so far puts her out of step with some progressive critics and skeptics in her own party, who see crypto as a completely unregulated source of market instability, tax evasion, and/or general shadiness.
Notably, that group includes her party’s leader; in July, former President Donald Trump told an interviewer that Bitcoin “seems like a scam” and warned it would harm the U.S. dollar.
Meanwhile, top Democrats like Wyden praised the work of GOP senators like Lummis to advance the crypto amendment. In a statement, the Finance Committee chairman noted his concern was primarily—as is typical for Wyden—on the data privacy front. “But having senators who come at issues from different angles is important to achieving results,” he said.
Observers look at Lummis and see a low-profile lawmaker making a smart play for relevance, staking a claim to own a poorly understood but rapidly growing policy area. In a body where some experts can count on one hand the number of lawmakers who care about crypto, much less understand it, Lummis’ emergence has been greeted as a breath of fresh air.
“She realizes there's been a lack of leadership in the past few years in the Senate in this space,” said Kristin Smith, executive director of the Blockchain Association, an industry trade group. “It was an opportunity for her to do something unique and special for a technology that her home state cares about, and that a lot of people around the country care about.”
On several levels, Lummis’ advocacy is hardly out of the blue. Her home state of Wyoming has been a national leader in establishing industry-friendly rules and boasts a robust crypto community; it’s in her political interest to be front-and-center on the issue.
She’s advocated for crypto as a way for Americans to separate their financial interests from the government and big business. And Lummis—an early backer of Sen. Rand Paul’s 2016 campaign before endorsing Trump—also has a libertarian streak that fits with her state’s own.
But some wonder if the advocacy isn’t in her financial interest, too, given her heavy personal investment in Bitcoin.
Lummis has held the digital currency since 2013—on the recommendation of her son-in-law, who’s in the crypto business himself—and has long been a booster. But this year, she became the first senator ever to come into office with cryptocurrency in their portfolio.
To some, the prospect of a senator shaping policy on cryptocurrency—while nursing a six-figure investment in it—poses a clear conflict of interest.
Dave Dodson, a hedge funder and Wyoming Republican, wrote in a July op-ed in state-politics site WyoFile that Lummis should sell her Bitcoin. “I believe her enthusiasm is driven by a genuine passion for cryptocurrency, not self-dealing,” wrote Dodson, who challenged Sen. John Barrasso (R-WY) in 2018. “But none of this matters when it pertains to a senator separating her personal interests from that of her official duties.”
There’s also the issue of Lummis’ boosterism of Bitcoin, specifically, while thousands of other cryptocurrencies compete with it for investors. In a recent CNBC interview, she mentioned Bitcoin dozens of times while mentioning none of its rivals.
Lummis’ office did not respond directly to those criticisms, noting only that senators are required to disclose their cryptocurrency holdings and transactions in the same way they are required to report stock buys.
Two government ethics experts contacted by The Daily Beast stopped short of stating that Lummis should sell her Bitcoin, but they also indicated the potential for ethical red flags.
“I totally understand why Sen. Lummis is a champion of crypto, she’s doing what she’s supposed to do in representing Wyoming,” said Dylan Hedtler-Gaudette of the nonpartisan Project on Government Oversight.
“On the other hand, because there is that personal pecuniary financial interest, and she’s got a unique position on the Banking Committee to have access to information that the average retail investor doesn’t, that’s where there could be some problems,” he added.
The Wyoming Republican is not the only lawmaker to own cryptocurrency. Toomey, her negotiating partner, purchased up to $30,000 worth of Bitcoin and Ethereum in July. He insisted to the Pittsburgh Post-Gazette afterward that his investment is “separate” from his work as top Republican on the Senate Banking Committee.
All of the action underscores cryptocurrency’s odd moment in the nation’s capital right now.
Policymakers are trying to resolve basic questions about the legal status of the industry—which is in a Wild West phase not unlike the early Internet—as more and more people invest in various cryptocurrencies and new ones sprout regularly. But it remains a sufficiently arcane issue that key policymakers, like Lummis, tend to have the knowledge because they own the currency.
Crypto lobbyists—a growing group that just barely had a foothold even a year ago—often note that their biggest obstacle is getting politicians, most of whom are not digital natives, to understand what the blockchain does or what a Dogecoin is. Plenty are admitting they need to learn more, as Sen. Shelley Moore Capito (R-WV) said to Politico after the crypto dustup.
But if there’s a consensus that Congress has an obligation to set crypto rules of the road—and there likely is, given the widespread support for the compromise amendment—that’s not a bad place for Lummis to be, as Congress’ first serious debate on it continues. There is hope that the House of Representatives, which is now taking up the infrastructure bill, can pass the crypto fix that the Senate couldn’t.
“We now know which senators are interested in this issue, and which ones want to learn more,” Lummis said in her statement. “I hope that between now and the next piece of digital asset legislation we will be able to further educate the Senate on how to appropriately regulate this space.”
Caitlin Long, a crypto evangelist and friend of Lummis’ who helped to write Wyoming’s industry rules, called the senator “a true Bitcoiner” and predicted her early move has set her up as a go-to on the subject for years to come.
“Congress will be weighing in on the regulation of crypto and she will be the one that cuts the deal on the Hill that Republicans will be relying upon,” Long told The Daily Beast.
That prospect may hold a different kind of political opportunity for Lummis. The crypto amendment debate showcased the willingness of apolitical, libertarian-minded people to engage with Congress on the issue, and some in the community have come away with the belief that these proudly “single-issue voters” are an untapped and potentially potent political force.
“D.C. underestimated this isn’t just an industry asking for something, this is people who interact with the crypto community every single day, people who use crypto to send money back to their families—they didn't understand how many average people cryptocurrency touches at this point,” said Weiss, the Bitcoin entrepreneur.
“Politicians,” he added, “have a lot to gain or lose by going for or against crypto right now.”