Senate Judiciary Committee leaders Chuck Grassley and Dick Durbin have raised concerns about a provision in a cryptocurrency market structure bill led by Senate Banking Chair Tim Scott, arguing it encroaches on their committee's jurisdiction. The dispute centers on exemptions for crypto software developers, which they say could hinder law enforcement efforts against money laundering. The bill's markup has been postponed amid this opposition and industry pushback.
Senate Banking Chair Tim Scott planned to hold a committee vote this week on sweeping cryptocurrency market structure legislation, but the markup was delayed due to jurisdictional objections and uncertainty over support. In a letter to Scott and ranking member Elizabeth Warren, Judiciary Chair Chuck Grassley (R-Iowa) and ranking member Dick Durbin (D-Ill.) objected to Section 604, which would exempt some crypto software developers from financial licensing requirements. They stated that the language "is precisely the type of legislative change that falls squarely within the Judiciary Committee’s jurisdiction," and noted their panel "was not consulted" beforehand.
The provision mirrors the bipartisan Blockchain Regulatory Certainty Act, sponsored in the House by Majority Whip Tom Emmer (R-Minn.) and in the Senate by Sens. Cynthia Lummis (R-Wyo.) and Ron Wyden (D-Ore.). Grassley and Durbin warned it exempts "a dangerously broad category of actors from treatment under" current criminal law, potentially precluding charges against figures like the founder of Tornado Cash, a mixer platform used for laundering. They added that the bill "would also create a significant enforcement gap for decentralized digital asset platforms," risking attraction of illicit actors such as cartels.
A Scott spokesperson, Jeff Naft, responded that the parliamentarian ruled the Blockchain Regulatory Certainty Act falls within Banking's jurisdiction. "The Chairman remains committed to protecting software developers while ensuring that law enforcement has the necessary tools to prosecute actual illegal money transmission operations."
Grassley expressed appreciation for Scott's efforts in a statement: "We must protect our national and financial security, while ensuring crypto and other novel industries play by the same rules as everyone else." Sen. Lummis defended the exemptions, saying, "Blockchain developers who have simply written code and maintain open-source infrastructure have lived under threat of being classified as money transmitters for far too long... This designation makes no sense when they never touch, control, or have access to user funds, and unnecessarily limits innovation."
The National Association of Assistant United States Attorneys echoed concerns, stating the bill would "materially limit prosecutors’ ability to pursue financial crime cases." Meanwhile, Coinbase CEO Brian Armstrong criticized the draft for provisions banning stablecoin rewards and tokenized securities, calling it a "giveaway to the banks" undermining President Trump’s pro-crypto agenda. The delay has weakened crypto market sentiment, with overall capitalization dropping 1.23% to $3.23 trillion and Bitcoin falling 1.2% to $95,466.37.
Democratic senators negotiating the bill have pushed for changes to address DeFi risks for illicit finance. Senate Democrats have rejoined talks, signaling seriousness about rebooting the legislation while keeping details private.
