When former congressional staffer Jake Rakov launched a primary bid against his old boss, Rep. Brad Sherman, D-Calif., the race seemed to fit a pattern.
The Democratic primary season is quickly shaping up to be dominated by intergenerational battles — and Rakov, at 37, presented himself as a fresh face against Sherman, who has been in Congress since 1997.
Other political forces, however, appear to be at work on Rakov’s campaign. As soon as he announced his challenge, donations from three officials at cryptocurrency trade groups landed in the upstart’s coffers, with a fourth donor coming in on their heels.
“Crypto is smart enough to realize that there are broad concerns among Democrats about aging in office.”
Jeff Hauser, the executive director of the Revolving Door Project, a left-leaning group that is critical of the digital assets industry, said crypto appears poised to use the narrative that incumbent Democrats are too old and out of touch.
“It would definitely send a message were they to be able to dislodge him,” Hauser said of Sherman. “Crypto is smart enough to realize that there are broad concerns among Democrats about aging in office.”
The cash, however, was a drop in the bucket: Unseating a fixture like Sherman would take more muscle. It nonetheless signaled how eager crypto is to topple industry skeptics.
Crypto insiders and skeptics alike say the industry is poised to latch on to the developing youth-versus-age narrative to elect friendlier legislators. Voters in heavily Democratic districts like Sherman’s, however, will not buy it, the longtime member of Congress predicted.
“If you go to a Democratic district and say, ‘Brought to you by the makers of Trump coin’ — they’re not going to buy that product,” Sherman told The Intercept. “My opponents can’t beat me without $5 or $10 million from crypto. And if $5 or $10 million from crypto comes in, that becomes the issue.”
Crypto Chips In
After spending more than $130 million on last year’s elections, the crypto industry is laying plans for another influence campaign in 2026. One trio of affiliated crypto super PACs already have more than $140 million in the bank.
Though these super PACs — which last year pumped millions into television advertisements with no mention of crypto — have not yet started spending on next year’s contests, the four officials at crypto trade groups made their donations to Rakov within a couple months of his campaign launch. (Rakov’s campaign did not respond to a request for comment.)
Within one day of Rakov’s announcement, Blockchain Association CEO Kristin Smith donated $3,500, Solana Policy Institute CEO Miller Whitehouse-Levine gave $1,000, and Cedar Innovation Foundation engagement director Colin McLaren chipped in $3,500, according to a Federal Election Commission filing. (All three are now with the Solana Policy Institute.)
More crypto contributions followed in May and June, when Satoshi Action Fund CEO Dennis Porter gave $500, and Haseeb Qureshi, a managing partner at the crypto fund Dragonfly Digital Management, gave $999.
Those numbers pale in comparison to the $500,000 that Rakov has donated to his own campaign, and will not go far to counteract the $4.1 million in campaign cash that Sherman has on hand.
For observers of crypto’s role in elections, however, they are a signal that the industry is watching the race closely.
“Big-Time Drug Dealers”
The crypto industry has ample reason to dislike Sherman. While many other Democrats have sought to chart a middle path, Sherman has in the past called for an outright ban of cryptocurrencies. A member of the powerful House Financial Services Committee, Sherman said his concerns about crypto include lax “know your customer” policies that have allowed money laundering to flourish, and the environmental impact of energy-intensive bitcoin mining.
On the House floor last year, Sherman said the demand for crypto was driven by “big-time drug dealers and big-time tax evaders and big-time human traffickers.”
McLaren, the crypto industry lobbyist who donated to Rakov, said in an email that he was motivated by Sherman’s position on crypto, pointing to an industry report card.
“He’s an F for a reason, calling crypto a ‘garden full of snakes,’ voting against concrete opportunities to protect consumers and unlock innovation, and spreading falsehoods about a legitimate industry,” McLaren said.
He also signaled support for other younger Democrats taking on older, incumbent critics of crypto.
“As a proud Democrat who has worked on campaigns for President Biden, Michael Bloomberg, and Vice President Harris, I applaud challengers like Jake Rakov, Jake Levine, and Patrick Roath who have stood up against senior Members of Congress who are out of touch with 21st century technologies, and voters and am proud to support them, either financially or in other ways,” McLaren said.
Levine is another of Sherman’s early challengers and Roath, 38, is taking on 70-year-old crypto skeptic Rep. Stephen Lynch, D-Mass., next year.
Sherman Marches On
Sherman, who is 70 years old, pointed out that he is 12 years younger than Biden, whose disastrous debate performance last year sparked a Democratic Party debate about its “gerontocracy” of aging elected officials.
He is generally dismissive of Rakov, who made a splash with his announcement that he would run in April. With few major policy differences outlined so far, Rakov will have to rely on crypto contributions to prop up his campaign, Sherman said.
“To the tune of a few thousand bucks, he is the crypto candidate. He would like to be the $5 to $10 million candidate. His initial reaction is, he’s with me on all the issues, he’s just younger,” Sherman said.
“Do you want an incumbent, or do you want a fresh face who has relatively similar policy positions?”
Christian Grose, a political science professor at the University of Southern California, said that so far the race is shaping up as an intergenerational contest.
“It’s a tough race, potentially, for the challengers, but also not out of the question,” said Grose. “At the end of the day, it really is about: Do you want an incumbent, or do you want a fresh face who has relatively similar policy positions?”
So far, neither Rakov nor Levine have distanced themselves from Sherman on an issue that might be a weakness for him in other Democratic districts: his strong support for Israel. Sherman said that candidates who do so would risk alienating the large number of pro-Israel voters in the district.
Crypto Risks Backlash
If crypto does spend big on blue-district primaries, it could face backlash in a way it did not during last year’s election, when it successfully backed numerous Democratic candidates in their primaries.
Trump’s net worth has exploded over the past year thanks to his family’s various crypto ventures, meaning that the entire industry must increasingly contend with Democratic voters’ anger about Trump’s meme coin and other ventures.
“Heretofore crypto skepticism has not been a voting issue, but as Trump becomes a billionaire — for real — many times over due to crypto shenanigans, I think it is possible that crypto will start getting tagged with the Trump stink,” said the Revolving Door Project’s Hauser.
Sherman said he was not worried about crypto in his race. Still, he said, the industry may see value in simply sending a message to other Democrats.
“Look, crypto is going to spend $100 million, 200 million trying to buy friends,” he said. “And remember, when they get involved in a race, it’s not just to influence that race: It’s to scare everybody else who might have a primary someday.”
