Following weeks of discreet discussions among the parties, Senate Democrats have presented their latest counterproposal regarding the crypto market structure bill. This proposal outlines a series of demands that echo those detailed in a public memo released in September, potentially highlighting the considerable divisions within the Senate.
The summary distributed this week and shared online earlier Wednesday indicates that Democrats have largely embraced the Republicans’ proposed framework. However, they are advocating for substantial structural modifications concerning financial stability, market integrity, national security enforcement, and the ethical conduct of public officials—primarily directed at President Donald Trump.
The Democratic documents, corroborated by insiders, were provided to “reach an agreement and move forward towards a markup” on a bipartisan bill.
This document clarifies the rationale behind senior Democrats’ rejection of the push for a markup next week, despite assurances from GOP negotiators that the bill is nearly finalized.
Their stance revolves around various unresolved issues: stronger disclosure and secondary-market protections for digital assets, enhanced tools to detect and prevent illicit finance, regulations to stop platforms from evading compliance obligations via decentralization claims, and stringent constraints on stablecoin yields reflecting longstanding anxieties about potential deposit flight from community banks.
Lawmakers from both parties remain at odds over how to allocate long-term oversight between the Commodity Futures Trading Commission and the Securities and Exchange Commission, leaving the bill’s fundamental regulatory framework in limbo. Democrats in the Senate Agriculture Committee had previously suggested a provision requiring bipartisan commissioners to be confirmed to these agencies in an earlier draft of the committee’s bill.
Democrats are also advocating for stringent ethics regulations to prevent elected officials from profiting from crypto projects, a demand intensified by the Trump family’s ventures, which have stirred allegations that digital assets have become Washington’s newest Swamp Asset.
However, one of the primary negotiators—Republican Senator Cynthia Lummis, chairwoman of the digital assets subcommittee within the Senate Banking Committee—stated on Tuesday that the White House was already rejecting ethics provisions and requests for Democratic nominees for the federal commissions tasked with regulating this domain. Trump and his administration have asserted that there are no issues with his personal business connections to the crypto industry as his administration seeks to formulate its policies.
The increasing urgency among some lawmakers and lobbyists regarding these negotiations stems from the dwindling days left in the 2025 Senate calendar, which concludes next week. Delaying into January complicates matters amid the impending political pressures of the midterm elections and the expiration of the Continuing Resolution currently funding the government, which ends on January 30, 2026—any government shutdown may cause further halts in progress, similar to the record-breaking shutdown of 2025.
The House of Representatives passed a market structure bill earlier this year, the Digital Asset Market Clarity Act, and its members continue to push for the Senate to adopt their bill with minor revisions, rather than creating new legislation. Although many elements of the Clarity Act are reflected in past drafts of the Senate’s work, it is still formulating a tailored version.
As lawmakers continue to negotiate, progressive organizations and unions have begun voicing concerns, labeling the current endeavor as a potential risk to U.S. financial stability and a danger for retirees depending on stable pensions. They align with the persistent objections of Senator Elizabeth Warren and similarly minded lawmakers, Democrats who have long criticized the growth of the crypto sector. Despite being sidelined by several in her party who are negotiating directly with Republicans, Warren remains the top Democrat on the Banking Committee, one of the two committees that must approve the bill.
