How Crypto Conquered Washington and Set the Stage for the Next Bubble

On February 11, 2025, Representative Sean Casten, an Illinois Democrat who sits on the House Financial Services Committee, questioned crypto industry executives at a public hearing about the dangers of the president of the United States launching a memecoin. These crypto tokens are also known as “shitcoins” since they’re widely considered worthless, a tool for pump-and-dump schemes. Because the rules of congressional decorum had not accommodated themselves to the vulgar conventions of 21st-century financial technologies, Casten had to phrase his question carefully.

On February 11, 2025, Representative Sean Casten, an Illinois Democrat who sits on the House Financial Services Committee, questioned crypto industry executives at a public hearing about the dangers of the president of the United States launching a memecoin. These crypto tokens are also known as “shitcoins” since they’re widely considered worthless, a tool for pump-and-dump schemes. Because the rules of congressional decorum had not yet accommodated themselves to the vulgar conventions of 21st-century financial technologies, Casten had to phrase his question carefully.

“It’s hard to talk about memecoins with the language that the industry uses to talk about them,” Casten said. “We’ll refer to them as ‘fecal coins’ for the purposes of this hearing. Is it safe to say from your smiles that you generally share the view of the industry that this is not something that has any innate value?”

“Yes,” an industry representative replied.

“The president of the United States issued something that has no innate value,” Casten said, before going on to talk about how retail traders may have lost billions speculating on the $TRUMP fecal coin.

On social media, crypto boosters were less interested in Casten’s charge that the president was swindling Americans than they were galvanized into transforming Casten’s cheeky euphemism into the very sort of worthless financial instrument it sought to describe. Less than two hours later, someone had created a memecoin under the ticker symbol $FECAL and started an X account and Telegram group to pump the token, urging speculators to buy $FECAL. The token’s price never rose above $0.00007, but about $6 million worth of the made-up coin was traded that day before it sputtered toward irrelevance. It was the kind of shitcoin pump-and-dump that happens hundreds of times a day, but this one was connected to the words and actions of a congressman. The logo for the token had Casten’s face on it.

The $FECAL episode was a small but telling sign of how crypto, despite being a relative flop commercially, has infiltrated American politics. Once the memecoin appeared, Casten’s unremarkable comment turned into an opportunity for graft and self-dealing, however ludicrously conceived and executed. Casten recognized as much. If he weren’t a known critic of the crypto lobby, Casten said, the token might have provoked some suspicion—that, say, the congressman was in on the grift. “You should be asking me hard questions about that, right?” he said. “It’s insane.”

If no part of society is immune from the all-powerful hand of the market, the same might now be said of crypto. Never has so much power, authority, and attention been afforded to such an economically unproductive industry. Never has so much energy and human potential been wasted chasing illusory profits in a business that relies on Ponzi economics. And never have politicians had so many opportunities for clandestine personal enrichment, in a parallel financial system that they’ve largely let run amok.

The cryptocurrency industry is about as old as the iPhone, yet it has accomplished very little, despite burning through hundreds of billions of real dollars to prop up a technology that still lacks much of a rationale for being introduced as legal currency. Through multiple bubbles, crypto has failed to scale beyond a base of hardcore believers and retail speculators who keep the casino running. It’s created more heartache than shared prosperity. It’s better known for its growing list of fraudulent companies than for its successful ones. In the United States, there are two publicly traded crypto exchanges: Coinbase and Bakkt. Coinbase is a major Trump supporter, while the Trump family have been reportedly negotiating to acquire Bakkt—partially owned by Trump ally and Small Business Administration director Kelly Loeffler—for their own crypto portfolio. Yet the industry is at the peak of its political influence.

Crypto has been successful in two areas: as a tool for crime—money-laundering, sanctions evasion, investment scams—and in its conquest of the American political scene. The two achievements seem deeply intertwined. In the 2024 political campaign cycle, crypto was the biggest donor by industry, raising more than $197 million. The crypto industry won nearly every race they got behind, and some of its leaders later claimed responsibility for helping to return Representative Jamaal Bowman, Representative Katie Porter, and Senator Sherrod Brown, all progressive Democrats, to the private sector.

Crypto supporters often claim that we are on the brink of a financial revolution—if only the government would get out of the way and allow these heroic financial innovators to do their thing. Now the industry will get its chance. With both houses of Congress under Republican control and an orange-pilled Trump in the White House, crypto is on the verge of getting the bespoke regulatory and legal regime it’s long demanded. Congress is now considering