Cryptocurrency legislation once seemed to be the rare issue that could draw bipartisan support in Donald Trump’s Washington, thanks to the industry’s prolific donations on both sides of the aisle.

Then Trump and his family attempted to monetize the presidency through a meme coin and a $2 billion crypto deal involving an Abu Dhabi-backed venture firm.

Democrats were, suddenly, outraged. Some centrist party members who had treated cryptocurrency with deference even began to walk away.

Nine Senate Democrats pulled their support for so-called “stablecoin” legislation over the weekend, imperiling the industry’s most likely legislative win this year. Meanwhile, Rep. Maxine Waters, D-Calif., blocked a House hearing on a broader, more ambitious crypto “framework” on Tuesday, leading several Democrats in a walkout.

The industry is still pushing for a vote on the legislation in the Senate, where Democrats continue to work on a potential compromise. Yet for skeptics who have had their warnings about crypto’s threat to the economy ignored for years, Democrats’ sudden conversion was heartening. They just wished it hadn’t taken Trump to wake the party up.

“Crypto has been able to buy so many Democrats because there was no organized opposition and thus little downside to politicians selling their vote,” said Jeff Hauser, a longtime critic of the industry and executive director of the Revolving Door Project. “Trump may just cause enough polarization to make crypto skepticism mainstream within the Democratic Party.”

Sporadic Opposition

The industry’s bipartisan alliances were on display last May, as the House debated its favorite legislation: the Financial Innovation and Technology for the 21st Century Act.

Out of 213 Democrats, 71 joined with Republicans to give overwhelming support to FIT21, as it is known, though the bill did not proceed to a vote in a Senate. The legislation is aimed creating a framework that would largely shield the industry from oversight by the Securities and Exchange Commission, which is viewed as having the sharpest regulatory bite.

The industry seemed even better positioned this year, thanks to Trump’s election and a........

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