US Crypto Bill Stalls Amid Senator & Industry Disagreements

Intense Standoff: US Senators and Crypto Industry Leaders Over Stalled Bill

 

The debate over cryptocurrency regulation in the United States is entering a critical phase, with lawmakers and industry leaders striving to shape a clear legal framework for the digital asset market. However, this progress faces numerous challenges, particularly due to bipartisan disagreements and strong industry opposition to specific regulatory proposals.

 

Key Event: Meeting Between Senators and Industry Leaders (October 2025)

 

On October 22, 2025, a crucial roundtable discussion took place between top executives from the cryptocurrency industry and pro-crypto Democratic Senators, chaired by Senator Kirsten Gillibrand (D-NY). This was considered one of the most important direct dialogues between US lawmakers and crypto executives of the year. Subsequently, Republican lawmakers also planned to meet with crypto CEOs later that week, indicating the high level of interest and tension surrounding the issue.

 

Reasons for the Stalled Bill and Key Disagreements

 

Bipartisan negotiations on digital asset legislation have stalled due to deep disagreements and backlash over a "leaked DeFi proposal" from Democrats. This proposal, titled "Preventing Illlicit Finance and Regulatory Arbitrage Through Decentralized Finance Platforms," focuses on curbing illicit activities in decentralized finance (DeFi).

 

Critics, including industry leaders and Republican members, have slammed this DeFi proposal as "poorly structured and anti-innovation." They argue that it could drive developers and capital offshore, undermining US competitiveness in the Web3 sector and stifling innovation.

 

This opposition led Senate Banking Committee Chair Tim Scott (R) to pause the bill's progress until an agreement on amendments is reached, making the future of crypto regulation in the US unpredictable.

 

Key Stakeholders and Their Perspectives

 

Democratic Senators

 

Senator Kirsten Gillibrand (D-NY): Led the roundtable, co-authored the bipartisan Responsible Financial Innovation Act (RFIA), and is a strong advocate for clarifying the crypto regulatory framework.

 

Republican Senators

 

Senator John Kennedy (R-La.): Emphasized the need for market structure legislation to address the "turf war" between the SEC and CFTC, noting that the lack of clarity creates significant confusion.

 

Senate Banking Committee Chair Tim Scott (R-SC): Has advanced market structure bills and co-sponsored the GENIUS Act (related to stablecoins). Republican proposals focus on dividing regulatory oversight between the SEC and CFTC and defining "ancillary assets" to clarify which tokens are not securities.

 

Regulatory Agencies

 

Securities and Exchange Commission (SEC): Under Chair Gary Gensler, the SEC tends to view many digital assets as securities, applying the Howey Test to determine its jurisdiction.

 

Commodity Futures Trading Commission (CFTC): Classifies Bitcoin and other cryptocurrencies as commodities, overseeing derivatives markets but lacking direct authority over non-derivative crypto transactions. The "turf war" between the SEC and CFTC has created confusion and prolonged litigation.

 

Crypto Industry Leaders (Expected to Attend the Meeting)

 

The list of key crypto industry leaders who participated or were expected to participate in the roundtable includes Brian Armstrong (Coinbase CEO), Sergey Nazarov (Chainlink), Mike Novogratz (Galaxy Digital), David Ripley (Kraken), Hayden Adams (Uniswap), Stuart Alderoty (Ripple), Dante Disparte (Circle), Rebecca Rettig (Jito), Miles Jennings (a16z Crypto), Kristin Smith (Solana Policy Institute). Their presence underscores the importance of direct dialogue with lawmakers.

 

Proposed Bills and Regulatory Approaches

 

Responsible Financial Innovation Act (RFIA) of 2025: This bipartisan bill, co-sponsored by Senators Lummis and Gillibrand, aims to create a comprehensive legal framework for digital assets, including defining regulatory oversight responsibilities and token classification.

 

Digital Asset Market Transparency Act (CLARITY Act) of 2025: Passed by the House of Representatives in July 2025. Its goal is to clarify the jurisdiction of the SEC and CFTC, classify digital assets, and require intermediaries to register with the CFTC.

 

Guidance and Establishing National Innovation for US Stablecoins (GENIUS Act) of 2025: This bill was passed and signed into law by President Trump in July 2025. It establishes a regulatory framework for payment stablecoins, requiring 100% reserves in liquid assets and transparent disclosures.

 

Challenges and Key Insights

 

Regulatory uncertainty is a major industry concern, believed to stifle innovation and drive businesses overseas. The SEC's current "regulation by enforcement" approach is criticized as inconsistent and unpredictable. Crypto legislation is described as "some of the most complex legislation," and partisan divisions are slowing progress, potentially pushing any significant bill past the 2026 midterm elections.

 

While the Trump administration is seen as "pro-crypto" and aims to make the US the "Crypto Capital of the world," realizing this vision still requires a clear and unified regulatory framework from Congress.

 

Lawmakers and regulators aim to foster innovation, protect consumers/investors, prevent fraud and financial crime, ensure financial stability, clarify definitions (securities vs. commodities), and strengthen US leadership in the digital asset sector. However, reconciling all these objectives in a rapidly evolving market is a significant challenge.

 

Conclusion

 

The standoff between US senators and industry leaders over the stalled crypto market bill reflects the complexity and critical importance of establishing a comprehensive legal framework. The outcome of ongoing discussions and negotiations, particularly the meeting on October 22, 2025, will significantly influence the future of cryptocurrency regulation and the development of this industry in the United States.

 

Disclaimer: The content above reflects the author’s personal views and does not represent any official position of Cobic News. The information provided is for informational purposes only and should not be considered as investment advice from Cobic News.