Democrat tells crypto execs Republicans ‘used them’: Sources

Senators involved in crafting crypto market-structure legislation may not be communicating much with one another, but they are talking to the industry.

Democrats and Republicans hosted dueling roundtables with crypto industry executives on Wednesday after negotiations between the parties stalled earlier this month. A bipartisan agreement appears to be a long way off, one source says, particularly if the industry continues to align itself with Republicans.

“Don’t be an arm of the Republican Party, they used you all and your megaphones to f*** us,” Democrat Sen. Ruben Gallego told industry members and fellow Democrats Wednesday morning, according to two people in attendance.

Sen. Kirsten Gillibrand, who was involved in bipartisan efforts to pass stablecoin legislation earlier this year, hosted the Democrats’ roundtable. Attendees included executives from major crypto companies and industry associations.

All Democrat Senators in attendance said they are committed to passing a crypto market structure bill, a person familiar with the matter said. Members added that Republicans themselves are not completely aligned on their draft.

The Republican meeting, which kicked off Wednesday afternoon, was hosted by Senate Banking Committee Chair Tim Scott and Cynthia Lummis, who worked closely with Gillibrand on stablecoin legislation and previous versions of a crypto market structure bill.

Some invited industry voices attended both meetings, but as of Wednesday afternoon, party leaders had no formal plan to meet with one another, according to a person familiar with the matter.

The roundtables come as industry members grow skeptical that market structure will pass this year – or even this session – of Congress. Increasing concern from Democrats about President Trump and his family’s involvement in the industry, coupled with internal disagreements between crypto companies about what should be in the bill, are posing challenges, one person involved in lobbying efforts told Blockworks.

The House passed the CLARITY Act in July. The Senate Banking and Agriculture Committees have since been working on their own versions of the bill, which will eventually have to merge with each other and CLARITY.

Senate Banking Committee Republicans released a revamped version of their bill last month. Democrats responded with a list of principles they’d like to see in the legislation. An additional Democratic proposal focused on DeFi was leaked earlier this month, furthering the divide between the two parties.

Senate Banking Committee Republicans are eager to markup their draft, but are growing frustrated with Democrats and their proposals. Republicans want Democrats to come to the table with a complete draft so negotiations can continue, according to two people familiar with the matter.

Wednesday’s roundtables come as the government shutdown continues, now in its third week and officially the second-longest in US history. Committee leadership will move ahead with crypto market structure legislation even if the shutdown continues, three people familiar with the matter told Blockworks.