The crypto industry celebrated big victories this year after backing Donald Trump’s return to the White House, but trouble ahead could dampen the party atmosphere.
Crypto executives popped champagne and danced to Snoop Dogg at a Washington party before Trump took office in January. Since then, the industry has seen friendly regulators drop lawsuits and new rules take shape. Yet key legislation remains stuck, and bitcoin prices have tumbled from their highs.
Trump’s Securities and Exchange Commission quickly reversed tough accounting rules from the previous government and dropped legal cases against major platforms like Coinbase, Binance, and others.
Lawmakers also passed groundbreaking rules for dollar-backed digital tokens. Bank regulators loosened restrictions on how financial institutions can work with crypto companies and gave approval for some firms to get banking licenses.
These changes, along with Trump building a government bitcoin reserve and the SEC greenlighting new crypto investment products, pushed bitcoin to record highs and opened doors for wider public use. Critics warned about risks to everyday investors and the broader financial system though.
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.
