The crypto market structure bill faces growing threats from ethics concerns around President Trump's TRUMP meme coin and a law enforcement clash over DeFi developer protections as the midterm clock ticks down.
The Memecoin Dinner Problem
Sens. Elizabeth Warren (D-Mass.), Adam Schiff (D-CA), and Richard Blumenthal (D-NY) pressed Bill Zanker, Trump's longtime business partner behind the TRUMP meme coin, for details on a planned Mar-a-Lago conference on April 25 for the token's biggest investors. Trump is listed as a featured guest.
Trump already committed to attend the White House Correspondents' Dinner on April 25, while White House officials previously said they had not yet scheduled the meme coin dinner.
"Organizers are promoting a conference by dangling access to President Trump to potential attendees (and in doing so, are encouraging purchases of his meme coin that will generate transaction fees for the President and his family) on a day he may not actually be able to attend," the Democratic trio wrote.
Democrats plan to demand an ethics provision in the market structure bill but have made little progress negotiating with the White House.
"Ethics is a looming threat to the bill's viability with both sides looking to roll the other on it when all other issues are buttoned up," a crypto industry lobbyist told Politico.
The DeFi Developer Clash
Law enforcement groups are sounding the alarm about a provision that would give some crypto software developers an out on federal licensing requirements.
They warn this could hamper the ability of authorities to go after illicit financial activity.
Meanwhile, Sen. Catherine Cortez Masto (D-NV), a senior Democrat on the Senate Banking Committee, is pushing for changes to address their concerns.
Senate Judiciary Chair Chuck Grassley has raised similar concerns.
Crypto isn't budging. "We're not open to changing the actual text of the provision," DeFi Education Fund Executive Director Amanda Tuminelli said.
The Progress So Far
Key senators struck a tentative deal on the long-running clash over stablecoin rewards last month and drafted new language after receiving feedback from both banks and crypto firms.
Lawmakers are now reviewing a revised proposal with industry lobbyists.
Moreover, White House economists published new research Wednesday downplaying the risks that yield-like rewards on stablecoins could pose to banks, a positive development for crypto firms in the debate.
The Midterm Threat
The bill would split oversight of the $2.5 trillion crypto market between Wall Street regulators.
Crypto executives and lobbyists say it would help establish the industry's standing in mainstream finance.
Crypto officials are growing concerned as the midterms approach, potentially ending their hopes for legislation this year.
