One senior US financial regulator told the BBC that the cryptocurrency market is “rife with fraud and hucksters and grifters”.

The US Securities and Exchange Commission (SEC) chief, Gary Gensler, claims the “investing public around the globe has lost too much money” due to crypto firms violating SEC regulations.

The business is spending millions on political contributions to influence November's US elections and get better legislation.

In addition to the presidential race between Donald Trump and Kamala Harris, all 435 House districts and 33 Senate seats are up for re-election.

The future of Bitcoin, one of the world's most contentious technologies, looks to divide Donald Trump and the departing Biden administration.

Trump has promised to make America “the crypto capital of the planet” and create a “strategic national bitcoin stockpile” like the US government's gold reserves to win crypto votes.

He founded World Liberty Financial, an external crypto firm, last week, saying “I think crypto is one of those things we have to do” but providing little information.

His three-year-old dismissal of Bitcoin as “seems like a scam” and a danger to the US currency has changed drastically.

Trump's renewed passion contrasts with Harris's vice presidency under Biden. Recent White House crackdowns on crypto companies have been widespread.

FTX founder and CEO Sam Bankman-Fried was sentenced to 25 years in prison for fraud in March after stealing billions of dollars from clients worldwide, many of whom are still seeking to retrieve their money.

Binance founder Changpeng Zhao was imprisoned for four months in April, and the business was fined $4.3bn (£3.2bn). He acknowledged to enable criminals, child abusers, and terrorists to launder money on his website in a US Justice Department prosecution.

Binance is also being sued by the SEC. This is one of a record 46 enforcement actions the banking regulator brought last year against corporations seeking to benefit from developing technologies.

Mr. Gensler argues, “This is a field that has come along, and just because they're recording their crypto assets on a new accounting ledger, they [wrongly] say ‘we don't think we want to comply with the time-tested laws

As a way to safeguard investors, the SEC has required firms seeking public funding to “share certain information” with them.

This happened in 1934, following the 1929 Wall Street crisis that started the Great Depression.

“Crypto is just a small piece of the US and global capital markets, but it can undermine everyday investors' trust,” argues Mr. Gensler.

Despite claims that crypto is a quick, affordable, and safe method to transfer cash, the Federal Reserve discovered that 12% of Americans used it in 2021 and 7% last year., external

One of Harris' advisers stated last month that she would “support policies that ensure that emerging technologies, and that sort of industry, can continue to grow”.

Her team has been meeting with sector leaders to develop confidence and offer crypto employers optimism for a better future whomever wins in November.

“I can't underscore enough how important this is, not just for the US, but for the world,” said Coinbase chief legal officer Paul Grewal. He attended these sessions.

“The US is an important crypto market, and much of the important technology has been developed here. I believe it's also crucial that we don't forget that the world isn't waiting for the US to act.”

He said “every vote is going to count, and crypto votes are no exception” in the close White House race.

Europe has followed the US cryptocurrency crackdown this year. In April, the EU passed external measures to curb illegal use of crypto.

However, other regulators are acting slowly. G20 leaders are developing basic cryptocurrency standards, but they are not legally enforceable and adoption has been gradual.

The US House approved a cryptocurrency regulation measure, but not the Senate. Critics say it would weaken consumer protection.

Coinbase's Mr. Grewal supports the bill: “This is not an industry that is shying away from regulation.” He said the industry wants bitcoin to be treated like conventional assets, “no tougher, but no weaker”.

With November's US elections approaching, the crypto sector sees a chance to elect pro-business legislators.

Public Citizen found that the industry had spent a record $119m on contributions by last month.

Rick Claypool, research director of the consumer advocacy group, said the funds are used “to help elect pro-crypto candidates and attack crypto critics, this is regardless of political affiliation”.

He says they've spent more on corporate contributions than any other business because they "are attempting to discipline the US congress to give in to their demands for less oversight, and to weaken consumer protections."