Crypto’s Trump-era wins face reality check as key laws stall
Remember the regulatory honeymoon? It's over.
For a hot minute, crypto felt like it had Washington in its pocket. Executive orders got drafted, bipartisan bills made headlines, and the industry's lobbyists popped champagne. The narrative was simple: digital assets were barreling toward mainstream legitimacy, with Uncle Sam holding the door open.
The Regulatory Hangover
Fast-forward to today, and that momentum's hit a brick wall. The landmark bills that were supposed to carve out clear rules? They're stuck in congressional purgatory. The regulatory frameworks that promised to separate the wheat from the chaff? Still just PowerPoint slides in some agency's server.
What happened? Political winds shifted. New priorities crowded the agenda. And the complex, messy reality of regulating a borderless, 24/7 financial system proved a lot tougher than writing a catchy press release. The industry's 'wins' are now facing their ultimate test: actual implementation.
Survival of the Fittest (and Most Compliant)
This isn't all doom and gloom—it's a filter. The pause in legislative action is forcing real businesses to build for the long haul, not just for a favorable regulatory window. They're focusing on substance over speculation, on utility over hype. The projects that survive this limbo won't be the ones with the best lobbyists, but the ones with the strongest fundamentals.
Meanwhile, the old-guard financial institutions watching from the sidelines are probably placing bets on which crypto startups run out of runway first—their version of venture capital.
The path forward is no longer about waiting for permission. It's about building something so robust, so transparent, and so damn useful that regulators have no choice but to catch up. The free ride is over. Now, the real work begins.
Critical legislation stalls in congress
But important laws that WOULD solve basic, long-running industry headaches have not materialized. This threatens to kill the good mood, several company leaders said at a Reuters NEXT gathering earlier this month.
“This year’s been a good year for crypto … notwithstanding that there’s a lot of work left to be done,” said Miller Whitehouse-Levine, who runs the solana Policy Institute and spoke at the event.
Trump promised to be a “crypto president” while asking the industry for campaign money. His family’s own ventures in digital currencies have helped push the sector into everyday conversations, executives say.
Within days of taking office, the SEC ended years of enforcement actions, during which it had sued dozens of companies, claiming they should have registered as securities dealers. Industry figures argued that these lawsuits were unfair, as most tokens behave more like commodities than traditional securities.
$245 million campaign push falls short
Crypto companies and their executives donated over $245 million during the 2024 election cycle to support friendly candidates, including Trump, according to Federal Election Commission records.
The industry moved closer to its goals in July when the House of Representatives approved legislation that would clarify when tokens count as securities, commodities, or something else entirely. This would give companies the legal certainty they have wanted for years.
However, the bill has stalled in the Senate. Lawmakers cannot agree on rules about money laundering prevention and requirements for decentralized finance platforms, which let people trade tokens without a middleman, three sources familiar with the talks said.
“The big elephant in the room is that this industry has spent millions of dollars trying to get legislation across the line,” said Sheila Warren, who leads the Project Liberty Institute and also spoke at Reuters NEXT. She noted uncertainty about whether this crucial win will actually happen.
With Congress now shifting attention toward the 2026 midterm elections, where Democrats could win control of the House, the bill may never become law, lobbyists said.
Industry cannot rely on friendly administrations
Without legislation, crypto companies must depend on regulatory guidance that a hostile future government could reverse. This might expose businesses to legal trouble or force them to scale back American operations.
The industry cannot count on friendly administrations forever, said David Mercer, who runs LMAX Group’s crypto exchange. “We need the market structure bill,” he said.
A spokesperson for Tim Scott, who chairs the Senate Banking Committee working on the legislation, said negotiations continue and the committee “looks forward” to moving the bill forward in “early 2026.”
Meanwhile, companies are pursuing regulatory workarounds, especially an SEC “innovation exemption.” Trump’s SEC chairman, Paul Atkins, has said this framework, expected next year, will let crypto companies try new business approaches immediately.
Yet despite regulatory progress, bitcoin hit a peak of $126,000 in October before crashing. The currency is now down 7% since January, while the S&P 500 gained 15%. Bitcoin fell to around $86,000 on Wednesday.
Scams continue to plague the industry
The slump comes as scams continue plaguing the industry. Americans lost over $330 million this year to crypto ATM schemes. More than 30 “wrench attacks” occurred, where kidnappers targeted crypto investors for their digital wallet passwords, according to researcher Chainalysis. One case made headlines when a 28-year-old investor escaped a Manhattan apartment after allegedly being held captive for weeks.
Cornell University economist Eswar Prasad said retail investors are “teetering between their fear of missing out on a juicy investment and concerns about the unsavory aspects of crypto and its promoters.”
Trump’s administration has been supportive of changes, including the passage of the GENIUS Act stablecoin legislation in July. The landmark law created federal rules for dollar-pegged tokens, requiring full reserve backing and clear oversight.
Les Borsai, who attended the first crypto pre-inauguration Washington ball in January, said policy changes are “making an impact.” With increasing clarity, he added, institutional investors should become “much more comfortable entering the space.”
However, industry executives acknowledge that without market structure legislation passing soon, the celebration may be short-lived as uncertainty looms over future regulatory approaches under potentially different political leadership.
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