Clarity Act teeters as mystery group targets crypto in D.C. ads

The crypto industry's central policy push – getting U.S. laws that legitimize it as a regulated part of the financial system – is hitting a new wall. A mysterious organization, Crypto Watchdog, is flooding Washington television and social media with ads linking crypto to terrorists and drug cartels.

"The worst people operating in the darkest places use crypto because there are no guardrails," one spot says. Another warns about connections to "drug cartels, terrorists and people praying against seniors." The recently formed group, run by media strategist Chapin Fay, says its mission is "to bring sunlight and transparency to an over-$2 trillion industry that has historically not been very transparent."

Fay, who worked on Republican campaigns but had no prior crypto ties, told CoinDesk his group started its campaign several weeks ago as the Digital Asset Market Clarity Act entered its Senate endgame. Some Democrats and Republicans have wavered or withheld support over the bill's most contentious provisions. Fay said he wants "decision makers and the American public to have all the information that they possibly can and understand the risks."

The group commissioned a survey of 1,000 voters in June. It found 65% viewed crypto with a "high level of distrust," similar to a CoinDesk survey earlier this year in which 60% of respondents saw crypto as a mostly negative economic force.

Crypto Watchdog won't say who funds it. When asked, Fay said, "I'm not going to speak for our funders." Pressed on whether transparency should go both ways, he called crypto transparency and information about his group's supporters "apples and oranges." The approach mirrors dark-money crypto advocacy groups like the pro-crypto Cedar Innovation Foundation, which also keeps its donors secret.