Senate Banking Committee Demands Urgent Crypto Market Framework Legislation—Will Washington Finally Move Faster Than a Stalled Bitcoin Transaction?

Lawmakers are scrambling to regulate crypto—just as Wall Street starts pretending they always loved blockchain.

Pressure Mounts for Clear Rules

The Senate Banking Committee is pushing full throttle on legislation to structure the chaotic crypto markets. No more 'wait-and-see'—this could be the year Congress actually does something before the next bull run.

Regulatory Whiplash Ahead?

With the SEC and CFTC still battling over jurisdiction, the Committee's move might finally force regulators to pick a lane. Traders brace for impact—nothing moves markets like panicked politicians playing catch-up.

The Real Question

Will this framework protect investors or just create more loopholes for the usual suspects? Place your bets—the house always wins.

Hearing on bipartisan regulatory effort

Witnesses at the Digital Assets Subcommittee hearing agreed that Congress needs to create a framework that clarifies regulations and classifications for the industry.

Ryan VanGrack, Coinbase’s vice president of legal, told lawmakers:

VanGrack said that the current ambiguity in rules leads to loopholes and gaps that are exploitable by bad actors. Former Commodity Futures Trading Commission (CFTC) chair Rostin Behnam, now a Georgetown fellow, echoed the sentiment and added that the non-security segment “still lacks a market structure regime.”

Both described a traditional hierarchy of customer, broker, exchange, clearinghouse, and custodian that can migrate to crypto with minimal change.

Greg Xethalis, general counsel at Multicoin Capital, warned that unclear guidance pushes founders and capital overseas and forces US start-ups to “get a law-firm opinion to launch” even simple projects. 

Sarah Hammer of the Wharton School pointed to Singapore’s licensing model and strict anti-fraud standards as proof that clear obligations can coexist with innovation.

Consumer safeguards and regulatory coordination

The principles sheet proposes innovation-friendly registration for intermediaries, right-sized capital and segregation rules, and explicit bankruptcy protection for customer assets. Behnam called segregation the “number-one issue” for user protection. 

The senators also endorsed a targeted anti-money laundering package that extends the Bank Secrecy Act and IEEPA tools to offshore entities that interact with US users, mirroring points raised by Hammer on the need to deter fraud without stifling compliant activity.

For federal agencies, the plan recommends safe-harbor pilots, no-action letters, and inter-agency coordination to avoid duplicative exams. The language echoes VanGrack’s view that the United States can “do better” than a patchwork of enforcement actions. 

Senator Hagerty citedas evidence that bipartisan momentum exists. Lummis, who co-sponsors a comprehensive bill with Senator Kirsten Gillibrand, urged colleagues to keep that bipartisan channel open despite political friction.

Committee members also pressed witnesses on practical benefits. Xethalis argued that decisive legislation WOULD prevent Europe from setting global norms, as occurred with internet commerce rules, and would forestall a replay of the lag in 5G and semiconductor leadership. 

Senator Angela Alsobrooks inquired about tangible benefits for households. Speakers highlighted lower settlement costs, faster remittances, and new credit rails.

Path to draft text

Staff will now translate the principles into statutory language that assigns the Securities and Exchange Commission authority over asset fundraising and the secondary trading of securities tokens. At the same time, the CFTC would supervise commodity tokens and derivative products. 

Lawmakers indicated that customer asset segregation, capital requirements scaled to risk, and a tailored exemption for token sales will FORM the foundation of the draft.

The next step is to finalize a market structure law, which would join a similar proposal.