10/15/2026
New York Magazine's "Intelligencer" delves into Senator Gillibrand's history with crypto and her support of the GENIUS and CLARITY Acts. The piece also mentions her son's start-up, which is partially backed by crypto investors. Full text is copied below.
https://nymag.com/intelligencer/article/kirsten-gillibrand-cryptos-favorite-democrat.html?oref=csny_firstreadtonight_nl
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New York Magazine / The Intelligencer: Crypto’s Favorite Democrat
Kirsten Gillibrand says she set out to regulate a grift-y industry. Now, she’s in an ethical morass.
At first, Maple was by my side. Kirsten Gillibrand’s Labradoodle pressed herself against my legs, happily accepting scratches and offering up a stuffed animal she hoped I would tug from her mouth (I obliged). New York’s junior senator, her once-blonde hair now closer to the white of Maple’s coat, then sat down across from me in her office, ready to explain how cryptocurrency had become one of her most prominent legislative priorities.
It was not an obvious place for her to end up. Two decades ago, Gillibrand won election to the House as a right-leaning Democrat from a conservative upstate district. After her appointment to Hillary Clinton’s vacated Senate seat three years later, she moved sharply left, emerging as a leading voice against sexual assault in the military and on college campuses. At the height of the Me Too movement, she led the charge in calling for Senator Al Franken to resign, then ran for president in 2019 as a staunch progressive, describing some of her former positions as moral failings and warning against “circles and systems of power” sustained by “corruption and greed.” Today, she is the Democratic Party’s leading champion of an industry notorious for fraud, spectacular collapses, and scams — and the eye-watering sums it spends to win the favor of politicians in both parties.
Crypto appeared on Gillibrand’s radar not long after her presidential campaign fizzled out. She said she first heard about it from constituents and financial regulators, then in hearings about cybercrime and illicit finance. “In the early stages, nobody knew anything about it. I didn’t know anything about it. So I started reading some books and listening to podcasts and trying to understand what the industry was about,” she told me.
The more she learned, she said, the more frustrated she became that lawmakers seemed content to leave it alone. “What I was seeing from Congress is that they were too unwilling and unable to learn about a new industry and actually do the basic regulation,” she added. Before running for Congress, Gillibrand spent 15 years as a securities lawyer. “I was very knowledgeable about credit default swaps when most of my colleagues didn’t even know what a credit default swap was,” she explained. “Complex commercial issues that need to be regulated are something I’m just very familiar with, and it’s not scary for me.”
In 2025, Gillibrand was the lead Democratic sponsor of the GENIUS Act, which laid down federal rules for stablecoins, or tokens designed to avoid the wild price swings of cryptocurrencies by pe***ng them to the U.S. dollar. Reporting at the time described her roaming the Senate floor with a binder, buttonholing skeptical Democrats, listening to their problems with the bill, and carrying their proposed changes back to Republican negotiators. Eighteen Senate Democrats, almost all of them recipients of crypto largesse, joined Republicans to pass the bill.
This year, she played much the same role for the CLARITY Act, the crypto industry’s great unfinished legislative project, pressing fellow Democrats for their votes. The sweeping bill would have moved much of digital-asset trading out of the Securities and Exchange Commission’s securities-law regime and into a new framework overseen by the chronically underfunded and much weaker Commodity Futures Trading Commission. The previous SEC had sued major trading platforms, including Coinbase, Kraken, and Binance, only for the suits to be dropped once Trump was sworn in for a second term. This was “why CLARITY was so existential for the industry,” according to Amanda Fischer, who served as chief of staff in the Biden SEC. The bill would have “codified and blessed their business structures and protected past conduct from future enforcement.”
It would also have made it easier for banks and other traditional financial firms to enter the crypto market, allowing them to trade, hold, lend against, and process payments in digital assets — an enormous step toward knitting the crypto industry into the traditional financial system. The bill appeared headed for passage until negotiations foundered over how to prevent elected officials from profiting from crypto, a newly urgent question given the Trump family’s budding crypto empire. When Republicans brought the bill to the floor without a bipartisan agreement on stronger ethics provisions, it became clear the bill would fail, and Gillibrand joined the rest of the Democratic caucus in voting “no.”
Gillibrand is not only one of crypto’s most important Democratic allies but also chair of the Democratic Senatorial Campaign Committee, responsible for raising money for her colleagues. According to reporting by Punchbowl News, Gillibrand’s chief of staff, Jess Fassler, invoked his boss’s fundraising position while urging other Democratic aides to help advance the GENIUS Act, according to four aides present. Some took the remark as an implicit warning about the political consequences of crossing the industry. (Fassler denies making any threats.)
Gillibrand now finds herself in a crypto-related ethical morass that extends beyond her chief of staff’s remarks. Her 22-year-old son, Theo, is the head of a start-up backed in part by crypto investors — including one who donates to his mother and the DSCC — that is seeking regulatory approval to bring a crypto-native trading product into conventional financial markets. Her campaign coffers are stuffed with crypto money, while former aides have rotated between her office and the industry. When I mentioned that her former communications director had made crypto purchases a week before she announced her first stab at crypto regulation, Gillibrand said she had “no lens on that at all.” Her office, she said, tells employees “to be good people and serve the state of New York and help people every day.”
By then, Maple, who had spent the interview pressed against my legs, was barking at me.
When Gillibrand first became aware of crypto, she said, it looked to her like an answer to a problem she had spent years trying to solve: the roughly one in five New York households that are unbanked or underbanked. Her attempts to authorize banking through the post office were being blocked by Republicans who opposed it as more big government and unfair competition for local banks. “One of the use cases of crypto that was brought to me very early when I started meeting with stakeholders — they’re like, ‘This democratizes finance,’” she said. Eventually, she concluded, “I could then accomplish what I was trying to accomplish with postal banking by highly regulating an industry that’s making banking available to everybody who doesn’t have a bank account.”
In 2022, Gillibrand heard that Cynthia Lummis, a Republican senator from Wyoming, wanted to work on crypto regulation too. Lummis was an enthusiast as well as an investor: She had first bought bitcoin in 2013 and purchased an additional $50,001 to $100,000 worth in August 2021, a transaction she disclosed late under the STOCK Act — the transparency law Gillibrand herself had sponsored. Gillibrand approached her. “Why don’t we write the regulation?” she remembered asking. “Why don’t we do the rules of the road? Because this industry has so much corruption, so much grift, so much wild west.”
The same year, Gillibrand and Lummis introduced the Responsible Financial Innovation Act, which attempted to divide regulatory authority over crypto assets between the SEC and the CFTC. That September, Gillibrand also co-sponsored a bill handing oversight of crypto spot markets, where digital assets are bought and sold for immediate delivery, to the CFTC. This was the legislation Sam Bankman-Fried, who had donated to Gillibrand that June, was lobbying for so aggressively it became widely known as the “SBF bill.” When FTX collapsed months later, many Democrats rushed to distance themselves from Bankman-Fried and crypto generally. Gillibrand gave his donations to charity but drew the opposite lesson. For her, the spectacular failure of FTX was proof not that crypto should be kept at arm’s length but that Congress had waited too long to bring it under the umbrella of financial regulation.
Gillibrand’s answer to nearly every criticism of crypto is that it makes regulation only more urgent, not less. “Why would you allow a trillion-plus-dollar industry to go around allowing people to buy and sell s**t and not regulate it?” she asked me. My suggestion that Congress might be better off refusing to legitimize the industry exasperated her. “It’s such an uneducated perspective,” she said. “It’s like saying ‘Don’t regulate the internet.’” Crypto was, of course, being monitored and targeted by the SEC, but Gillibrand contended that many crypto tokens function more like commodities, hence making the CFTC a more appropriate regulator — which is what the industry argues as well.
One of Gillibrand’s central rationales — that digital assets can bring the under- and unbanked into the financial system — has an obvious problem. Tonantzin Carmona, the director of economic policy at the Century Foundation who studies financial inclusion and cryptocurrency, noted that most ordinary consumers buy crypto through apps and exchanges that generally require a bank account or debit card. Crypto ATMs offer a cash work-around but can carry steep fees and have become fertile ground for scams.
The greater concern is what happens if Gillibrand succeeds in making crypto easier to use and more deeply embedded in ordinary finance. “In my opinion, the CLARITY Act was a financial crisis waiting to happen,” Lee Reiners, a former Federal Reserve Bank of New York official who teaches financial regulation at Duke University, told me. When FTX collapsed in 2022, the damage remained largely contained within crypto because digital assets still had relatively few connections to banks and traditional markets. CLARITY, Reiners argued, would have helped erase that separation: “Certainly, if CLARITY had passed, it would have supercharged the integration of crypto into the financial system.” At the same time, he said, the bill would have given the industry a “patina of regulation” — enough of a federal seal of approval to attract more customers and institutions without imposing the full set of rules that governs conventional securities firms. “The crypto industry wanted this bill to pass,” he said, “so they could point and say, ‘Look, we are regulated now. Come on in. The water’s warm and nice.’”
Corey Frayer, who served as a senior adviser to former Biden SEC chair Gary Gensler and worked on crypto-asset policy, argued that the entire theory behind CLARITY was misguided. “The securities laws are not only about the business you’re offering,” Frayer told me. “The securities laws are primarily about how you raise money for that business.” If a company raises money from investors by promising them profits, he explained, it must comply with securities laws, including disclosure requirements, whether it’s developing a conventional product or a cryptocurrency. To him, the industry’s argument for different rules amounted to companies insisting they shouldn’t have to follow those laws because — he waved his hands — “technology.” He pointed to Coinbase, which combines functions that conventional finance generally separates: exchange, custody, clearing, and brokerage and venture investing. For an industry that talks frequently about democratizing finance, Frayer said, “the crypto market is actually far less democratic. It is far more concentrated, more run by powerful, concentrated interests than even the admittedly broken traditional markets.”
Mark Hays, who specializes in cryptocurrency and financial technology for the nonprofits Americans for Financial Reform and Demand Progress, put it this way: “They just want to become your bank, your broker, and everything else under one roof — but without the same rules those entities have to agree to because we spent 100 years trying to keep them under regulatory check.”
Even bitcoin, widely regarded as the most decentralized and commodity-like cryptocurrency, is less so than its proponents claim, according to Hilary Allen, a professor at American University’s law school who specializes in financial regulation. “Bitcoin’s actually not particularly decentralized,” she told me, since only a handful of mining pools is responsible for producing the vast majority of new blocks on the bitcoin network.
The GENIUS Act, signed into law last year, created other potential hazards. The law requires stablecoin issuers to back their tokens one-for-one with assets including cash and short-term Treasury securities. To Allen, that could become a source of systemic risk if stablecoins grow large enough. A run on a major stablecoin would force its issuer to raise cash to meet redemptions, potentially by selling Treasuries. “If you dump a lot of Treasuries at one point,” Allen told me, “you’re going to cause haywire in the Treasuries market,” which underpins much of the global financial system. She also noted that stablecoins resemble money-market mutual funds, which the government has had to stabilize during previous crises.
Gillibrand makes the opposite case: Tying stablecoins to cash and Treasuries under federal supervision makes the market safer, not more dangerous. “You don’t reduce systemic risk by pretending a market doesn’t exist,” one of her aides told me.
Many of the fears about crypto ultimately depend on its becoming much bigger than it is today. “There’s all kinds of financial-stability implications, but they’re by and large premised on volume,” Allen said. “So if no one uses these things, then most of the risks are avoided.”
This is a point on which the two sides agree, sort of. Gillibrand told me what she expects to happen with crypto if she gets the CLARITY Act through in the future.
“Once it’s regulated,” she said, “people will be able to use it much more.”
The industry would naturally also like that to happen. And Gillibrand has benefited greatly from big crypto’s generosity. Donors to her 2024 reelection campaign included Coinbase CEO Brian Armstrong; Ripple co-founder Chris Larsen and chief legal officer Stuart Alderoty; Electric Capital co-founders Avichal Garg and Curtis Spencer; Solana co-founder Raj Gokal; Digital Currency Group executive Mark Murphy; and Andreessen Horowitz co-founders Marc Andreessen and Ben Horowitz, along with their wives, Felicia Horowitz and Laura Arrillaga-Andreessen.
After Gillibrand’s election, the money kept coming. Contributors to her campaign or affiliated committees since then have included Coinbase president Emilie Choi and chief policy officer Faryar Shirzad; Paradigm co-founder Fred Ehrsam and managing partner Alana Palmedo; Ripple CEO Brad Garlinghouse; Andreessen Horowitz crypto partner Chris Dixon; Kraken chairman Jesse Powell and co-CEO David Ripley; and Tyler Winklevoss, the Gemini co-founder and major crypto donor who, with his brother, Cameron, personally lobbied Trump against his first nominee to chair the CFTC, Brian Quintenz, helping derail his nomination. Trump instead installed Mike Selig, a former lawyer for cryptocurrency firms and prediction markets.
In June, Gillibrand’s son Theo raised $30 million for a start-up called American Perpetuals Exchange Corporation. The fundraising round was led by Lux Capital — a shareholder of FTX before it collapsed — which valued the company at $300 million. One of Theo’s angel investors is Chris Larsen, the Ripple co-founder and Gillibrand donor. Although APEC is not a cryptocurrency exchange (it wants to offer perpetual futures on stocks and stock indexes, a type of highly leveraged derivative with no expiration date), the product came to prominence in crypto markets. These contracts provide no new capital to the companies whose shares they track. Instead, they offer traders another way to gamble on price swings, potentially magnifying losses and spreading them through the broader financial system — a familiar Wall Street arrangement in which the profits are private but the risks are everyone’s problem.
Theo himself is a product of the crypto world. Before graduating from Stanford, he interned at Andreessen Horowitz and completed a fellowship at Paradigm. In May 2025, while his mother was helping push GENIUS through the Senate, he co-authored an article in a Stanford newspaper founded by Peter Thiel urging Congress to pass the bill, without disclosing his obvious connection to its lead Democratic sponsor.
Theo Baker, a Stanford classmate of Theo Gillibrand’s and the author of a recent book about the university’s relationship with Silicon Valley, offers a perspective on how a 22-year-old with the right last name ends up running a $300 million crypto-inspired finance company. At Stanford, Baker said, a network of investors and scouts is on the lookout for teenagers who can be “quickly and heavily monetized.” APEC said Lux did not recruit Theo Gillibrand while he was at Stanford, but its success does depend heavily on a good relationship with regulators in Washington. The company has found open doors at Trump’s SEC and CFTC, the agencies that will determine whether and how its novel contracts can legally trade. Theo Gillibrand has said that CFTC officials were “very excited” by his proposals and that Trump’s financial regulators were more willing to listen than their predecessors had been.
A crypto ecosystem has developed around Senator Gillibrand’s office as well. Before joining Gillibrand’s staff and working on crypto legislation, Dorothy DeWitt worked at Coinbase, then ran a division of the CFTC. Andrew Siegel went from serving as general counsel at Galaxy, one of the country’s largest crypto firms, to a senior counsel job with Gillibrand. The revolving door is hardly unusual in Washington, but one case inside Gillibrand’s office raises a different question.
Senior congressional staff are required to file financial-disclosure statements if they earn above a certain threshold. When I pulled those of Evan Lukaske, Gillibrand’s former communications director and the aide handling her crypto messaging, they indicated he had bought between $1,001 and $15,000 of bitcoin on March 9, 2022, and the same amount of ether eight days later. A week later, Gillibrand announced she and Lummis were writing comprehensive crypto legislation. That bill — the first stab at what would eventually become known as CLARITY — specifically placed bitcoin and ether under CFTC commodity regulation, and Lukaske served as a spokesman defending it when it was unveiled that June. Lukaske did not respond to questions about what he knew when he made the trades or whether he was acting on nonpublic information.
Chris Swartz, senior counsel and deputy director of ethics at Democracy Defenders Fund and a former federal-government ethics official, stopped short of saying those trades establish wrongdoing. But, he said, Gillibrand’s staffers “should have known that purchasing crypto might create at least the appearance of impropriety.” Whether Lukaske’s purchases were “simply inadvisably timed trades or suggest use of nonpublic information for private gain is a question of fact that would have to be looked into,” Swartz said. Either way, “the timing raises serious concerns.”
I asked Gillibrand whether she had ever given her staff guidance about trading cryptocurrency. “No,” she said, “we don’t involve ourselves with our staff at all about what they own and what they have.”
Would she have a problem with staff members buying crypto while she was working on legislation that could benefit the industry?
“I could care less what they do with their money,” she said. “This is not a nanny state.”
The senator says she set out to regulate a grift-y industry. Now, she’s in an ethical morass.
