Talks between Senate Democrats and top cryptocurrency executives grew heated on Wednesday as both sides debated the future of U.S. digital asset regulation. The closed-door meeting centered on a proposed comprehensive crypto market structure bill, which has sparked intense controversy since a draft leak earlier this month.
The six-page proposal, driven by Senate Democrats, seeks to define when entities âexercise control or sufficient influenceâ in decentralized finance (DeFi) â a move critics say could effectively ban DeFi protocols. Lawmakers, however, insist their aim is to curb illicit finance and enhance consumer protection.
âIâm really f*cking pissed about what happened last week,â one Democratic senator reportedly said, referring to political backlash following the leaked draft. âDonât be an arm of the Republican Party.â
Inside the Meeting
Industry figures, including Coinbase CEO Brian Armstrong, Galaxy CEO Mike Novogratz, Circleâs Dante Disparte, and a16zâs Miles Jennings, attended the tense session. Participants said discussions began with brief introductions but quickly turned combative as senators expressed frustration over industry-backed criticism of the leaked proposal.
Despite tensions, both sides agreed on the need for a clear legislative framework. Kristin Smith of the Solana Policy Institute described the session as a ânecessary step,â adding that âDemocrats really do want to get this done.â
Republican Counterpart Meeting
Later that day, Senate Republicans held their own meeting led by Banking Committee Chair Tim Scott, emphasizing the urgency of finalizing the bill. Republicansâ version seeks to divide oversight between the SEC and CFTC, and introduce the term âancillary assetsâ to clarify which tokens are not securities.
Scottâs office urged Democrats to âcommit to a markup date so the digital asset industry can finally have the regulatory clarity it needs to compete and innovate in America.â
With midterm elections looming in November 2026, legislative timing remains uncertain. Industry leaders fear delays could extend regulatory ambiguity, though some note that the SECâs ongoing âProject Cryptoâ may address several issues in the interim.
âIf this does end up slipping, itâs not the end of the world,â said Smith. âBut the process of crafting fair, comprehensive crypto legislation needs to keep moving.â
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.