After weeks of tense negotiations between the two parties, Senate Democrats have made their latest counterattack on the cryptocurrency market structure bill, outlining a series of demands similar to those they first made in a public memo in September and potentially revealing the true depth of divisions within the Senate.
A summary shared this week and circulated online early Wednesday showed that Democrats have accepted much of the framework proposed by Republicans. However, they insisted on major structural reforms related to financial stability, market integrity, national security enforcement and the political conduct of public officials—primarily targeting President Donald Trump.
People familiar with the matter confirmed that the Democratic document is aimed at “making a deal and moving forward” on a bipartisan bill.
The document helps explain why top Democrats have resisted pushing for a hike next week, despite repeated public assurances from Republican negotiators that the bill is close to being ready.
Their stance focuses on several unresolved aspects: enhanced disclosure and secondary market protections for digital assets, updates to tools to identify and deter illicit finance, rules to prevent platforms from circumventing compliance obligations by claiming decentralization, and tight limits on stablecoin yields, reflecting long-standing concerns about deposit flight from community banks.
Lawmakers on both sides of the aisle are also at odds over how to divide long-term regulation between the Commodity Futures Trading Commission and the Securities and Exchange Commission, leaving the bill’s core regulatory structure yet to be determined. Democrats on the Senate Agriculture Committee had previously included a provision in an earlier draft of the committee’s bill that would have required bipartisan confirmation of commissioners to those agencies.
Democrats are also pushing for strict ethics rules to prevent elected officials from issuing or profiting from cryptocurrency projects, a demand fueled by Trump family businesses that have fueled accusations that digital assets have become Washington’s latest swamp asset.
However, Republican Sen. Cynthia Lummis, one of the key negotiators and chairwoman of the Senate Banking Committee’s digital assets subcommittee, revealed on Tuesday that the White House had rejected ethics and Democratic nominee requests from the federal committee that oversees the field. Trump and his officials insist there is nothing wrong with his personal business relationships with the cryptocurrency industry as his administration seeks to shape policy.
Some lawmakers and lobbyists appear to be getting even more frantic about negotiations with just days left on the 2025 Senate calendar, which ends next week. Heading into January, the process will face political pressure from the midterm elections and the expiring Continuing Resolution, which currently funds the government and is set to expire on January 30, 2026 — a government shutdown that could further delay any progress, much like the record shutdown in 2025.
The House of Representatives already passed a market structure bill, the Digital Asset Market Clarity Act, earlier this year, and its members still frequently urge the Senate to accept their bill and make some changes rather than create legislation of their own. But while much of the Clarification Act was echoed in previous Senate working drafts, it’s still being crafted as a customized version.
As lawmakers continue to debate the issue, progressive groups and labor unions have been on the sidelines, criticizing the current effort as a potential threat to U.S. financial stability and a danger to retirees who rely on stable pensions. They join the ongoing resistance from Senator Elizabeth Warren and like-minded lawmakers (Democrats) who have long criticized the rise of the cryptocurrency industry. Although Warren has been sidelined by many in her party who have negotiated directly with Republicans, she remains the top-ranking Democrat on the Banking Committee, one of two committees needed to pass the bill.
