**Key Takeaways**
– Will the upcoming meeting resolve the Democrats’ hold-out? This could be the end goal, but market expectations remain very low.
– What’s the bone of contention in Congress? The controversial DeFi regulation proposal by Democrats has irked both the industry and Republicans.
– The crypto market structure regulation has hit a major roadblock amid Congress fallout.
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The latest clash in crypto regulation revolves around the Senate Democrats’ push to regulate decentralized finance (DeFi). This initiative has caused significant friction, prompting Republicans to withdraw from negotiations and putting the year-end deadline for passing the bill into doubt.
Crypto executives are scheduled to meet with pro-crypto Senate Democrats on October 22nd in an effort to break the stalemate. According to former FOX Business reporter Eleanor Terrett, the meeting will include industry leaders such as Coinbase CEO Brian Armstrong, Galaxy’s Mike Novogratz, Uniswap [UNI] CEO Hayden Adams, and others.
### Democrats’ Hard Stance
The Senate’s version of the crypto market structure bill has yet to advance out of committee. The core disagreement between Republicans and Democrats centers on the bill’s scope and several key regulatory areas, complicating the legislative path forward.
Pro-crypto Senate Democrats, led by Reuben Gallego, have blamed Republicans for effectively “crashing out” of negotiations. Jacques Petit, spokesman for Senator Gallego, told Politico:
“They (Republicans) asked for paper and substance, and we delivered. They then turned around and leaked our proposal and pretend to be surprised that our parties have policy differences.”
On the other side, representatives for Senate Banking Chair Tim Scott criticized the Democrats, claiming the proposal lacked good faith. According to Tim Scott’s office:
“The document was not written in legislative text, included multiple incoherent policy ideas, and was not a good-faith effort to engage on market structure.”
The Blockchain Association, the leading advocacy group for crypto interests, also expressed disappointment with the Democrats’ proposal.
### What’s Next?
It’s important to note that the stalled Senate draft is completely separate from the House’s version of the bill—the CLARITY Act—which was advanced in July. A harmonized version of these two bills, if successfully negotiated, could then pass a Senate floor vote.
Following Senate approval, the legislation would return to the House for final agreement before it is sent to the president’s desk to be signed into law.
Republicans initially aimed to progress the bill out of committee by October 30th and finalize it into law by the end of the year. However, with the current deadlock, those timelines now appear uncertain.
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Stay tuned as these critical negotiations unfold, with significant implications for the future regulation of DeFi and the broader crypto market.
https://ambcrypto.com/defi-regulation-fight-derails-u-s-crypto-bill-odds-of-passage-collapse-to-17