The Blockchain Eight: How Rep. Auchincloss Became Crypto's Man in Congress

December 09, 2025

In March 2025, Congress voted to eliminate IRS reporting requirements for decentralized finance platforms, a move that the Joint Committee on Taxation estimates will cost taxpayers four billion dollars in lost revenue and enable widespread tax evasion.¹ The IRS can track your Venmo transactions, your PayPal payments, and your bank transfers. But thanks to this vote, DeFi platforms are now free to facilitate billions of dollars in unreported cryptocurrency trades with no obligation to tell the government anything.

Rep. Jake Auchincloss was one of just 76 House Democrats to vote for this giveaway to crypto billionaires.² His vote was not an anomaly. It was the latest chapter in a years-long pattern of Auchincloss using his position in Congress to advance the cryptocurrency industry’s interests while personally benefiting from crypto investments and accepting tens of thousands of dollars from crypto executives and firms.

The DeFi Vote: Enabling Tax Evasion and Money Laundering

The Biden administration finalized a rule in late 2024 requiring DeFi platforms to file Form 1099-DA on cryptocurrency sales, bringing these platforms under the same reporting requirements that apply to traditional brokers.³ The rule was designed to close a massive loophole that crypto traders had exploited for years to avoid paying taxes on their gains.

Congress used the Congressional Review Act to overturn this rule. The House passed H.J.Res.25 by a vote of 292 to 132, with Auchincloss joining 75 other Democrats in siding with Republicans.² The Senate approved it 70 to 28, and President Trump signed it into law.³

Rep. Danny Davis of Illinois, speaking in opposition, noted that the Joint Committee on Taxation had estimated the change “is expected to cause $4 billion in tax cheating” because cryptocurrency users could simply shift their trades to DeFi platforms to avoid reporting.¹ Rep. Lloyd Doggett of Texas warned that exempting DeFi “makes tax evasion and money laundering so much easier,” pointing out that decentralized exchanges are already known for laundering proceeds from illicit drug sales and human trafficking.¹

The double standard could not be clearer. Federal law still requires banks and payment apps like Venmo to report transactions to the IRS. A working family that receives a few hundred dollars through Venmo faces more reporting scrutiny than a crypto whale moving millions through DeFi platforms. Auchincloss voted to preserve this two-tiered system that benefits wealthy speculators at the expense of ordinary taxpayers.

The “Blockchain Eight”: Sabotaging SEC Oversight

Auchincloss’s advocacy for the crypto industry predates his vote on DeFi reporting. In March 2022, he joined a bipartisan group of eight members of Congress in sending a letter to SEC Chair Gary Gensler demanding the agency halt its information-gathering from cryptocurrency firms.⁴

The letter’s signatories became known as the “Blockchain Eight.” The group included Republican Representatives Tom Emmer of Minnesota, Warren Davidson of Ohio, Byron Donalds of Florida, and Ted Budd of North Carolina, along with Democratic Representatives Josh Gottheimer of New Jersey, Ritchie Torres of New York, Darren Soto of Florida, and Auchincloss.⁴

Their argument rested on an obscure procedural claim: that the SEC’s document requests violated the Paperwork Reduction Act, a law designed to limit unnecessary bureaucratic burdens on the public.⁴ The letter argued that the SEC’s wide-ranging information requests “might be at odds” with the PRA’s limits on agency paperwork burdens.

This rationale was, in the words of The American Prospect, “highly dubious.”⁴ The Paperwork Reduction Act explicitly excludes “administrative action or investigation involving an agency against specific individuals or entities” from its scope. Former Senate investigator Elise Bean noted that it is “rare to see anyone invoke the PRA to try to stop or slow down a federal investigation.”⁴

The letter’s true purpose was revealed in Rep. Emmer’s follow-up tweet, which celebrated preventing “crypto startups” from facing “burdensome reporting requirements.”⁴ The Blockchain Eight had provided a temporary reprieve for crypto firms facing legitimate regulatory scrutiny by citing an administrative rule that did not actually apply to enforcement investigations.

The FTX Money: Refusing to Return Fraud Proceeds

In 2021, Auchincloss’s campaign received $5,800 from Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX.⁵ This represented the maximum legal contribution: $2,900 for the primary election and $2,900 for the general election.

When FTX collapsed in November 2022 and Bankman-Fried was arrested on fraud and money laundering charges, many politicians who had received his donations moved quickly to return them or donate equivalent amounts to charity. The Democratic National Committee, Democratic Senatorial Campaign Committee, and Democratic Congressional Campaign Committee collectively set aside over one million dollars in FTX-linked donations for return.⁶

Auchincloss took a different approach. He refused to return the money.

In a Fox Business interview, Auchincloss stated: “I’m not going to return money to a criminal sitting in jail right now. I’m holding that money to make creditors whole.”⁵ He claimed he would give the funds to FTX’s defrauded customers “at the earliest legal opportunity” once he received guidance from the Department of Justice.⁷

This explanation raised more questions than it answered. If Auchincloss genuinely wanted to help FTX’s victims, he could have donated the $5,800 to a victim’s fund or charity serving those affected by the fraud. Instead, he kept the money in his campaign account while offering a vague promise of future restitution that, as of this writing, has not materialized.

Earlier in the controversy, Auchincloss had offered a more revealing explanation. He quipped that “that money is out the door helping elect Democrats,” essentially acknowledging that the funds had already been spent on his campaign.⁸ His later pivot to the “holding for creditors” rationale appeared to be damage control rather than a principled position.

Following the Crypto Money

Auchincloss’s pro-crypto votes did not emerge from a vacuum. They followed years of campaign contributions from cryptocurrency industry executives and firms. According to FollowTheCrypto.org, Auchincloss has received approximately $33,000 in contributions from cryptocurrency companies and executives over the 2020 to 2024 period.⁹

The venture capital firm Andreessen Horowitz, which has invested billions of dollars in cryptocurrency companies including Coinbase, gave approximately $29,800 to Auchincloss: $19,800 to his 2022 campaign and $10,000 to his leadership PAC in 2024.¹⁰ The firm’s co-founders, Marc Andreessen and Ben Horowitz, each wrote $5,000 checks to Auchincloss’s PAC in late September and early October 2024.¹⁰ Andreessen Horowitz has separately poured $44 million into the Fairshake super PAC, the cryptocurrency industry’s primary political vehicle.¹¹

The Winklevoss twins, co-founders of the Gemini cryptocurrency exchange, each contributed $6,600 to Auchincloss’s 2024 campaign, for a combined total of $13,200.¹² Cameron Winklevoss made his donations in two payments of $3,300 on June 3 and July 1, 2024.¹² Tyler Winklevoss followed the same pattern.¹³ The Winklevoss twins have given nearly $5 million to the Fairshake PAC and over $10 million total to crypto-friendly political causes in the 2024 cycle.¹¹

Combined with the Bankman-Fried donation and smaller contributions from other crypto-linked donors, Auchincloss has received over $50,000 from the cryptocurrency industry during his time in Congress.

Personal Investments: Flipside Crypto

The pattern of crypto industry support becomes even more concerning when combined with Auchincloss’s personal financial interests. In his 2020 financial disclosure, filed as he entered Congress, Auchincloss reported holding up to $15,000 in Flipside Crypto, a blockchain analytics company.¹⁴

This meant that while Auchincloss was voting on cryptocurrency policy and signing letters demanding the SEC back off its crypto investigations, he personally stood to benefit from the success of the cryptocurrency industry. He sold his Flipside Crypto stake in March 2022, the same month he signed the “Blockchain Eight” letter to the SEC.¹⁵ According to his disclosure, he sold the investment “below fair market value” back to the company.¹⁵

The timing raises obvious questions. Did Auchincloss sell his crypto investment because he recognized the conflict of interest inherent in holding crypto assets while actively intervening in crypto regulation? Or did he simply decide the investment was no longer worth holding? Either way, the fact that he held these assets while taking pro-crypto policy positions demonstrates a troubling entanglement between his personal finances and his legislative actions.

The Broader Pattern: Crypto Money in Politics

Auchincloss’s relationship with the crypto industry reflects a broader pattern of the sector’s aggressive political spending. According to Public Citizen, crypto super PACs led by Fairshake amassed over $102 million for the 2024 elections, making cryptocurrency interests the third-largest super PAC funding source in American politics.¹¹

Corporate contributions to Fairshake include $23.5 million from Coinbase, $23 million from Ripple Labs, and millions more from Jump Crypto, Circle Financial, and Kraken.¹¹ These funds have been deployed to support crypto-friendly candidates in both parties and, critically, to punish those who support stronger regulation.

The industry’s political strategy is straightforward: reward politicians who do their bidding and punish those who don’t. Auchincloss has consistently positioned himself on the rewarded side of that equation, voting to weaken oversight, blocking SEC investigations, and retaining donations from a convicted fraudster.

Conclusion: Who Does Auchincloss Represent?

The record is clear. Rep. Jake Auchincloss has received over $50,000 from cryptocurrency industry sources. He held personal investments in a crypto company while in office. He signed a letter blocking SEC oversight of crypto firms using a “highly dubious” legal rationale. He refused to return $5,800 from Sam Bankman-Fried, a man now serving a 25-year prison sentence for defrauding investors. And he voted to eliminate IRS reporting requirements for DeFi platforms, a change that will cost taxpayers $4 billion and make tax evasion and money laundering easier.

Meanwhile, ordinary Americans face strict reporting requirements on their Venmo transactions and bank transfers. Working families cannot hide income from the IRS the way crypto traders now can, thanks in part to Auchincloss’s vote.

The question Massachusetts voters must ask is simple: does Jake Auchincloss represent the people of the Fourth District, or does he represent the cryptocurrency billionaires who fund his campaigns?

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