By Hannah Lang
Dec 18 (Reuters) - After celebrating Donald Trump's second presidential term by swilling cocktails and partying to Snoop Dogg at a pre-inauguration event in January, the crypto industry went on to notch major legislative and regulatory victories this year.
But the party may not continue into 2026.
Among the industry's biggest wins under Trump's crypto-friendly second administration were the Securities and Exchange Commission's swift move to rescind stringent crypto accounting guidance
and dismiss Biden-era lawsuits against Coinbase, Binance and others, as well as the passage of a landmark law creating federal rules for dollar-pegged crypto tokens.
A top bank regulator also eased rules on banks' crypto dealings and conditionally approved bank licenses for crypto firms. Along with Trump's creation of a bitcoin stockpile and the SEC's approval of a raft of new crypto products, the changes together helped propel bitcoin to new peaks this year and pave the way for wider crypto adoption, sparking warnings from critics over potential investor and systemic risks.
But crypto market structure legislation and carve-outs from SEC rules that should fix core, longstanding problems for the industry are yet to come, threatening to sap the industry's celebratory mood, according to multiple industry executives, some of whom spoke at a Reuters NEXT event 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, CEO of the Solana Policy Institute, which advocates for policies to advance blockchain networks, speaking at Reuters NEXT.
CRYPTO PRESIDENT
Trump courted industry cash pledging to be a "crypto president," and his family's own crypto ventures have helped to propel the sector into the mainstream, say executives.
Just days into his presidency, the SEC swiftly ended a years-long crackdown during which it sued dozens of crypto companies it alleged should have registered with the agency. The industry said those lawsuits were unfair because most crypto tokens more closely resemble commodities than securities.
Aiming to get that position enshrined in law, crypto companies and executives donated more than $245 million in the 2024 election cycle to promote pro-crypto candidates including Trump, according to Federal Election Commission data.
The industry inched closer to that goal in July when the House of Representatives passed a bill that would, among other things, define when tokens are securities, commodities or otherwise, giving the industry long-hoped-for legal clarity.
But that has stalled in the Senate, with lawmakers divided over provisions on anti-money-laundering and requirements for decentralized finance platforms, which allow crypto users to buy and sell tokens without an intermediary, according to three sources familiar with discussions.
"The big elephant in the room is that this industry has spent millions of dollars trying to get legislation across the line," but it is uncertain that it will score that key victory, said Sheila Warren, CEO of the tech-focused nonprofit Project Liberty Institute, who spoke at Reuters NEXT.
With Congress already pivoting to focus on the 2026 midterm elections, in which the Democrats could take the House, that bill may not make it into law, said lobbyists.
That would leave crypto firms to rely on regulatory guidance that could be overturned under a hostile future administration, potentially exposing companies to legal challenges or forcing them to curtail their U.S. businesses.
Long-term, the industry cannot rely on pro-crypto administrations, said David Mercer, CEO of LMAX Group, which operates a crypto exchange. "We need the market structure bill."
A spokesperson for Tim Scott, the chair of the Senate Banking Committee which is co-writing the Senate's version of the bill, said the committee is negotiating and "looks forward" to advancing the legislation in "early 2026."
REGULATION FIXES
In the meantime, crypto firms are turning their attention to regulatory fixes, especially an SEC "innovation exemption."
Trump's SEC chair, Paul Atkins, has said the framework, which he expects to unveil next year, will allow crypto companies to immediately launch new business models, but it is unclear how broad in scope it will be.
Mercer said that exemption could give projects, such as token issuers, "room to breathe" without fearing SEC prosecution. The SEC did not provide comment.
Crypto companies also expect that increased coordination between the SEC and the Commodity Futures Trading Commission will streamline oversight across crypto products. That should get under way soon with Trump's CFTC chair nominee, Michael Selig, who is currently an adviser to Atkins, poised to be confirmed by the Senate.
"It is making an impact," said Les Borsai, co-founder of Wave Digital Assets, who attended the industry's first-ever crypto pre-inauguration Washington ball in January, referring to the policy and personnel changes.
With increasing clarity, he added, institutional investors should become "much more comfortable entering the space."
(Reporting by Hannah Lang in New York; Additional reporting by Elizabeth Howcroft in Paris; Editing by Michelle Price and Matthew Lewis)
