- Senators on the Agriculture Committee advanced legislation on crypto market structure in a party-line vote Thursday.
- Democrats said they could not support a bill that would allow President Donald Trump to continue profiting from crypto.
- One senator also seemed to suggest that the use of DeFi by criminals remains a problem.
U.S. Senators on the Agriculture Committee advanced legislation on crypto market structure along party lines on Thursday.
Republicans voted in favor of the bill, which details rules for trading in so-called digital goods and includes protections for developers of decentralized financial protocols.
“In order to protect American consumers, local innovation, and enable American businesses to continue to grow and prosper, we must grant the CFTC regulatory authority over spot trading in digital products,” committee Chairman John Boozman, an Arkansas Republican, said before the vote.
“Advancing this bill is the first step, and there are many more steps to take to achieve these goals. »
Familiar fault lines emerged in the vote, with Democrats saying they could not support a bill allowing President Donald Trump to get rich with crypto while he pushed for a bill that could bring the asset class into the mainstream.
Democrats also said they would not support a bill that did not guarantee Democratic representation on the Commodity Futures Trading Commission, one of the two main financial regulators in the United States.
The organization is currently led single-handedly by Trump appointee Michael Selig. Historically, the CFTC and other regulatory commissions have been comprised of both Democrats and Republicans.
One senator even suggested that decentralized finance remains a sticking point.
“We keep talking about this thing called DeFi. Go to a town hall and talk to your constituents about DeFi and see how many of them will be able to talk about it with clarity,” said Sen. Ben Ray Luján, a Democrat from New Mexico.
“There are loopholes that terrorists and cartels are using today that the United States knows about,” he said later, adding that the details were not widely known because those reports were classified.
The road to follow
Even though Republicans have advanced the bill, its broader prospects remain uncertain. A companion bill from the Senate Banking Committee, which details which digital assets should fall under the purview of the Securities and Exchange Commission, was scheduled for a similar vote earlier this month.
But that vote was canceled at the last minute after Coinbase CEO Brian Armstrong said he could not support the bill, citing, among other things, its ban on the stable yield of coins and its strict anti-money laundering provisions.
The two bills will need to be combined before they can be put to the full Senate for a vote. And Senate rules mean any bill will have to get bipartisan support.
If a combined bill gains support in the House, it would have to be reconciled with a version that passed the House of Representatives last summer.
These obstacles will be difficult to overcome in an election year.
The Trump enigma
The Trump family’s foray into crypto remains a key issue for Senate Democrats.
“The White House has made this infinitely more difficult,” New Jersey Sen. Cory Booker, the bill’s lead Democratic negotiator, said Thursday.
“I’ve had private conversations with Republican colleagues and staffers who agree with me. … Donald Trump himself making fun of crypto is like me creating a Cory coin,” he added, calling it “ridiculous.”
Other senators have complained about the lack of Democrats on the CFTC.
“We cannot give the CFTC this broad new authority when it only has one Republican member,” said Sen. Amy Klobuchar, Democrat of Minnesota.
Republicans rejected a series of amendments proposed by Democrats, including those that would limit the ability of federal officials to profit from crypto and that would block crypto companies from receiving taxpayer-funded bailouts.
Boozman said the amendments went beyond the scope of the bill or were better handled by the Senate Banking Committee.
Nonetheless, Booker said he hoped a crypto market structure bill could gain bipartisan support.
“What divides us here is not a fundamental disagreement on either side,” he said. “We have this short distance with a clear path forward.”
Aleks Gilbert is DL News’ DeFi correspondent based in New York. You can reach him at aleks@dlnews.com.
