The crypto industry watched with grim foreboding as its landmark bill detonated on the Senate floor Tuesday. Blame first fell on Democrats, none of whom voted to advance it. But some of the industry's own supporters pointed elsewhere: at President Donald Trump and the roughly $1.4 billion in income he generated from crypto ventures last year. Now the industry is confronting the other side of its embrace of Trump: The alliance brought major wins in Washington, only for the president's own crypto dealings to become an obstacle to locking some of those gains into law.

Crypto spent hundreds of millions of dollars trying to reshape Washington, betting that a friendlier White House and Congress would finally give the industry the legal footing it had sought for a decade. In many ways, the bet worked. The Trump administration dismantled much of the enforcement regime crypto companies had fought under President Joe Biden, regulators began writing friendlier rules and Trump signed landmark stablecoin legislation. The Clarity Act was supposed to be the bigger prize. At its core, the bill was meant to settle a question that has hung over crypto for years: who regulates what. It would have divided responsibility between the Securities and Exchange Commission and Commodity Futures Trading Commission and set rules for exchanges, brokers and other firms operating in the market.

Then Trump's business dealings became part of the perceived problem. Several people in the industry now say his financial ties to crypto helped turn an already difficult bill into an even harder sell. "The failure of Clarity begins and ends with Donald Trump," said Justin Slaughter, senior adviser at crypto and financial technology investment firm Paradigm. The memecoin that launched days before his inauguration was the first brick in the road to this failing, he said. Senator Elizabeth Warren said before Tuesday's vote that a vote for Clarity is a vote to bless Donald Trump's corruption. Trump has consistently denied that his family's business interests conflict with his duties as president. A White House spokesperson said the only blame belongs to Democrats.