The crypto industry has just suffered a paradoxical defeat: Its biggest backer, President Donald Trump, inadvertently helped scuttle chances for a major legislative win thanks to revelations of the riches he and his family have made off of their crypto ventures.

The industry is now scrambling to advance its agenda through crypto-friendly regulation instead of legislation. But the prospect of Democratic control of one or both chambers of Congress after the November 2026 midterm elections, as well as potentially winning the White House in 2028, leaves the long-term durability of those gains uncertain.

At stake was legislation that would have provided light-touch regulation over crypto assets. The industry, which had enjoyed a…