U.S. Democrats and Crypto Industry Deepen Conflict Over Regulatory Bill

Democratic senators in the U.S. Senate and leading figures from the crypto asset (cryptocurrency) industry are reportedly clashing over a bill to regulate the crypto market.

On the 22nd (local time), The Block reported that Democratic lawmakers discussed a draft of a market-structure bill with representatives of the crypto industry. The meeting was the first since a leaked six-page draft of a bill related to decentralized finance (DeFi) prepared by Democrats earlier this month.

The draft directs financial authorities such as the Treasury Department to define whether a particular individual or institution exercises "substantial influence," prompting industry criticism that it is effectively a DeFi ban.

One Democratic senator reportedly told industry representatives, "I'm really angry about the leak of the draft bill," and said, "Don't act as a tool of the Republicans." Another attendee said, "Trust has been broken, but Democrats are clearly intent on passing legislation."

They also denied that discussions on the bill were being delayed by Democrats. One senator warned, "There are disagreements about the current draft even within the Republican Party," adding, "If the industry obstructs the negotiation process again, discussions could return to square one."

Smith, head of the Solana Policy Lab, evaluated, "This meeting was a timely step, and Democratic lawmakers showed serious intent to finalize the bill." He added, "Concerns were raised about illicit funding and conflicts of interest related to the Trump family and crypto assets."

Meanwhile, Republicans held a separate meeting that afternoon to continue discussions on their own bill. Sen. Tim Scott, chair of the Senate Banking Committee, emphasized, "The Democrats need to set a markup date so that the crypto industry can compete and innovate within a clear regulatory framework."