Cryptocurrency winter chills sympathy from DC regulators.

Inflicting billions of dollars in losses is a great way to lose sympathy among politicians.

• Time has run out: It’s too late for the crypto industry to get the kind of regulation it’s been pushing for. The crypto winter arrived before any new laws could be written, and has changed the whole tone of the debate in Washington.

Why it matters: Crypto insiders have long dreamed of a world where everything they do is carved out into their own bespoke regulatory regime: one primarily designed to encourage innovation, and that doesn’t try to apply 20th century laws to a 21st century financial system.

• That dream has, realistically, died.

The big picture: Regulation, by its nature, tends to concentrate on minimizing harm rather than maximizing capital formation. Right now, the harm caused by crypto is more visible than ever, while any real benefits seem small in comparison — and shrinking fast.

Driving the news: Documented crypto frauds have topped $1 billion, according to the FTC. The Federal Reserve is furious at Voyager Digital for saying that it was FDIC-insured. The FBI is warning of cryptocurrency scams, and the Senate is holding hearings on them. The SEC is beefing up its Crypto Assets and Cyber Unit — and, Bloomberg reports, is investigating Coinbase for illegally trading in securities.

How it works: The SEC, from its earliest days, has been charged with overseeing a level playing field, where no one has an unfair advantage. By necessity, that has to be done by reducing the ability of the rich and powerful to take advantage of the little guy — something that’s been endemic to crypto for years.

• Meanwhile, a tone-deaf Coinbase is proudly putting out animated videos of self-described degenerates wreaking havoc in a dystopian future. Such shenanigans fatally undercut any attempt to paint themselves as a grown-up and sober financial institution.

The bottom line: Crypto still has some friends left in Congress — but not nearly enough of them to pass any new laws any time soon. Meanwhile, regulators are baring their teeth, and none of them have any visible desire to cut the industry any slack.