Tensions rise as Senate Democrats, crypto executives meet on sweeping digital assets bill

Talks between Senate Democrats and cryptocurrency industry leaders over a bill to regulate digital assets at large got intense on Wednesday. 

Crypto executives met with a group of Senate Democrats in Washington D.C. to discuss a bill that aims to regulate crypto market structure. Senate Republicans are holding their own meeting to discuss the topic in the afternoon. 

Meetings on Wednesday come after a proposal from Senate Democrats was leaked earlier this month. The six-page proposal focused on decentralized finance and would designate the Treasury Department and other financial regulators to define when an entity or person “exercises control or sufficient influence.” This draft drew heavy criticism from many in the crypto industry who said it would essentially ban DeFi. 

During the Democrat meeting on Wednesday, a source familiar said the meeting began with 30 minutes of introductions from industry leaders, who they say didn’t offer insight beyond top-level insights from what they wanted to see in the bill. 

“I’m really f*cking pissed about what happened last week,” one Democratic senator said, according to the source. “Don’t be an arm of the Republican Party. They used you all and your megaphones to fuck us.” 

The source familiar also said trust had been broken, but said that Democrats want to get a bill done. They emphasized that lawmakers were not slow walking the legislative process but noted Republicans themselves have current issues with how the bill stands. Democrats also seemingly warned that if crypto advocates tried to derail negotiations as they did a few weeks ago, it would set the bill’s progress back, according to the source.

“If something happens similar to what happened last week, it’s gonna set us back again,” one Democratic senator allegedly said.

The Senate is working on its own legislation to regulate crypto market structure after the House passed its version this summer. The Senate Banking Committee, led by Republicans, has a draft that looks to allocate jurisdiction between the Securities and Exchange Commission and the Commodity Futures Trading Commission as well as create a new term for “ancillary assets” to clarify which cryptocurrencies are not securities. Republicans need Democratic support to pass a bill. 

Notably, Sen. Elizabeth Warren, who is the top Democrat of the Senate Banking Committee, was not at the meeting, according to a source familiar. Senate Minority Leader Chuck Schumer attended the meeting. 

Several crypto executives were at the Democratic meeting, including Solana Policy Institute President Kristin Smith, Galaxy CEO Mike Novogratz, Coinbase CEO Brian Armstrong, Jito Labs Chief Legal Officer Rebecca Rettig, a16z Head of Policy Miles Jennings, Circle Chief Strategy Officer Dante Disparte, among others. 

The Republican-led meeting began at 2 p.m. ET. 

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