Senate Crypto Bill Talks Hit New Roadblocks as Democrats Issue Fresh Demands

Senate Democrats have issued a new counteroffer in the ongoing negotiations over a bipartisan crypto market structure bill, signaling deeper tensions than previously visible. The summary, circulated this week, shows Democrats accepting large portions of the Republican framework while insisting on major structural revisions involving financial stability, market integrity, national security safeguards, and ethics rules aimed partly at President Donald Trump. According to individuals familiar with the talks, the proposal was intended to move discussions toward a markup, but it has instead highlighted the significant gaps that remain.

Democrats are resisting attempts to rush a markup next week, despite Republican claims that the bill is nearly complete. Their objections center on unresolved issues such as stronger disclosure requirements for digital assets, tighter secondary-market protections, enhanced tools to combat illicit finance, and rules that prevent crypto platforms from avoiding oversight by declaring themselves decentralized. They are also pushing for limits on stablecoin yield to prevent destabilizing outflows from community banks — a long-standing concern within the party. A major sticking point remains how regulatory authority should be divided between the CFTC and SEC, with Democrats previously advocating for bipartisan commissioners at both agencies.

Another flashpoint is the Democratic push for stricter ethics rules preventing elected officials from launching or profiting from crypto ventures. This demand has intensified amid scrutiny of Trump-linked crypto activities. However, Republican negotiator Senator Cynthia Lummis revealed that the White House is already rejecting these ethics provisions and Democratic requests for agency nominees.

Time pressure is mounting. The Senate’s 2025 calendar ends next week, and any delay into January risks colliding with midterm election politics and the impending Jan. 30, 2026 expiration of the government’s Continuing Resolution. A shutdown — like the record-setting one in 2025 — could stall progress even further.

The House has already passed its own bill, the Digital Asset Market Clarity Act, but the Senate continues crafting a separate version. Meanwhile, progressive groups, unions, and lawmakers like Senator Elizabeth Warren are warning that the emerging framework could threaten financial stability and pension security, adding more friction to already difficult negotiations.