- Senators are considering a January 15 markup for crypto market structure legislation.
- But protections for crypto developers and a very public battle over stable coin yields remain sticking points.
Protecting DeFi developers is one of several issues that have divided U.S. senators rushing toward legislation on crypto market structure, according to a source familiar with the negotiations.
That increase is currently scheduled for Jan. 15, said Sen. Tim Scott, Republican of South Carolina and chairman of the Senate Banking Committee. Breitbart in an exclusive interview.
“Next Thursday we will have a vote on the structure of the market,” he told the publication. “Advancing President Trump’s affordability agenda starts with a markup. »
Representatives from dozens of crypto companies traveled to Washington, D.C., on Thursday to lobby senators as they try to iron out the final details of a bipartisan framework for crypto legislation that President Donald Trump demanded shortly after returning to the White House last year.
A market structure bill would end a regulatory turf war between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Both agencies have attempted to assert jurisdiction over crypto markets under the Biden administration.
Provisions in a version of the bill released by the Senate Banking Committee would give the SEC oversight of so-called ancillary assets, digital assets that do not carry the traditional financial rights of company stock. This bill would allow these tokens to fall under the jurisdiction of the CFTC once their distribution is sufficiently decentralized.
Republican senators recently made a “final offer” to their Democratic counterparts, according to a document obtained by Policy. This offering includes new language regarding investor protection and illicit financing.
But unresolved issues include “ethics” — Democrats have repeatedly demanded that new legislation ban Trump and his family members from starting or running crypto businesses — as well as a provision of federal law that prosecutors have used to target crypto developers such as Tornado Cash co-founder Roman Storm.
“We are relatively close,” the source told DL News. “There are still some outstanding issues regarding the protection (and) self-custody of software developers.”
The Blockchain Regulatory Certainty Act
Prosecutors accused Storm and other unlicensed money transmitting crypto developers of creating – and allegedly operating – crypto mixers such as Tornado Cash and Samourai Wallet.
DeFi proponents argue that prosecutors’ legal theory threatens the very principle of decentralized finance, in which self-executing software enables peer-to-peer cryptographic transactions.
The Justice Department has attempted to limit prosecutors’ use of the Monetary Transmittals Act to charge crypto developers. Last April, it issued a short memo stating that it no longer intended to pursue crypto mixer developers “for the actions of their end users or for unintentional regulatory violations.”
That didn’t stop prosecutors from taking Storm to trial, where a jury found him guilty of violating the money transfer law.
Furthermore, the developers of Samourai Wallet pleaded guilty to violating this law. They were sentenced to five years in prison.
The legislation involved is among several issues Senate Republicans have listed for discussion at a Tuesday meeting. So did the Blockchain Regulatory Certainty Act, a bill that would codify that crypto developers are not money transmitters.
It was not immediately clear whether any progress had been made on those issues as of Thursday afternoon.
Representatives of several senators involved in the market structure negotiations did not respond DL News“Requests for comments.
Stable yield
There are even cracks within the Republican ranks, according to Punchbowl News.
Republican Senators John Kennedy of Louisiana and Thom Tillis of North Carolina have reportedly sided with the banking lobby in a raging debate over stable coin yields. Kennedy and Tillis did not respond to requests for comment.
In a letter to senators on Monday, the American Bankers Association said some stablecoin issuers had “exploited a perceived loophole” in last year’s stablecoin law, the Genius Act, by offering their customers “rewards” on their stablecoin holdings.
These rewards are often far more lucrative than the meager interest rates that bank depositors typically earn on their savings.
Turning a blind eye to stablecoin rewards could cause banks to lose billions in customer deposits — money they lend to businesses and future homeowners, which fuels the U.S. economy, the ABA argued.
Crypto companies, in turn, cited recent research from a Cornell University professor that interest-bearing stablecoins pose little threat to bank deposits.
Aleks Gilbert is DL News‘ DeFi correspondent based in New York. You can reach him at aleks@dlnews.com.
