Crypto Market Structure Bill Targets Mid-May Senate Markup Amid Ethics Disputes

U.S. crypto market structure legislation is advancing toward a mid-May Senate Banking Committee markup, according to negotiations reported by The Block this week, though significant disputes over ethics provisions and Trump family crypto ties remain unresolved.

Sen. Thom Tillis, R-N.C., a key negotiator, told FOX Business that he asked Senate Banking Committee Chair Tim Scott, R-S.C., to “move forward with scheduling” a hearing to amend and vote on the legislation. Tillis said he hoped to have fresh legislative text a few days ahead of the markup. However, Tillis told Politico that he would oppose the crypto bill if it did not include ethics language before it leaves the Senate.

Timeline and Negotiator Positions

Chair Scott said in a Thursday interview with Fox Business that lawmakers were in the “red zone” to get a bill passed, adding that Tillis and other Republican senators are “on board.” Scott stated: “I just want to have 13 of 13 Republicans. That makes it easier for us to have a bipartisan markup in May is my hope. Then we’ll get this thing to the floor of the Senate in June or July.”

Sen. Angela Alsobrooks, D-Md., a key Democratic negotiator, indicated through her spokesperson Meredith Happy that multiple issues must be resolved for a bipartisan vote. “Senator Alsobrooks remains focused on the substance,” Happy said. “If we want a bipartisan vote, we have to resolve illicit finance and ethics.”

Key Substantive Hurdles

The bill has been stalled in the Senate Banking Committee for months over disputes regarding stablecoin rewards, which has been the main blocker alongside ethics and decentralized finance (DeFi) concerns. The legislation would broadly regulate the crypto industry by designating regulatory jurisdictions between the Commodity Futures Trading Commission and the Securities and Exchange Commission.

The Senate Banking Committee has been attempting to resolve how to address stablecoin rewards, with public disputes between a White House crypto advisor and banks. DeFi language has also drawn scrutiny, with concerns that it could weaken prosecutors’ ability to pursue financial crimes.

Chair Scott has said he does not believe ethics provisions fall under his committee’s jurisdiction. It remains unclear where ethics language would be addressed, though it will likely need to be resolved before a full Senate floor vote.

Political Obstacles

On Thursday, Sen. John Kennedy, R-La., said he would withhold support for crypto legislation, in part because of “deep frustrations with the House and White House over a stalled Senate housing bill,” according to Punchbowl News. Passage in the Senate requires 60 votes, making unanimous Republican support and Democratic cooperation necessary.

Ethics and Trump Family Crypto Ties

Ethics has become increasingly central to the legislative debate as midterm elections approach. Democrats are expected to raise the crypto industry’s lobbying and the Trump family’s crypto connections in their campaigns. When the Senate Agriculture Committee advanced its version of the crypto bill earlier this year, no Democrats voted in favor, citing Trump’s crypto interests as a major obstacle.

Bloomberg estimated that Trump has earned at least $1.4 billion from his crypto ventures, including from DeFi and stablecoin project World Liberty Financial. The Trump family also holds a 20% stake in mining firm American Bitcoin. Last weekend, Trump hosted a gala luncheon at his Mar-a-Lago estate in Florida for holders of the TRUMP memecoin, raising Democratic concerns.

The House’s version of the legislation, nicknamed Clarity, includes language prohibiting “any member of Congress or senior executive branch official from issuing a digital commodity during their time in public service.” According to a crypto industry source, the White House red line is restricting federal officials’ family members.

Conflicts of interest have been discussed repeatedly in Senate Banking Committee hearings. Most recently, Senate Banking Committee’s top Democrat, Sen. Elizabeth Warren, seemingly called Federal Reserve Chair pick Kevin Warsh a “sock puppet” for Trump, citing his notable crypto holdings. “Having a sock puppet in charge of the Fed would also give the president access to the Fed’s powerful authorities to enrich himself, his family and his Wall Street buddies,” Warren said at a hearing last week. “It could mean granting special accounts to his family’s crypto company or bailouts to his friends on Wall Street if they get into trouble.”

Passage Prospects

Taken together, stablecoin rewards disputes, ethics concerns, DeFi language, and dwindling floor time cast doubt on the bill’s prospects. One crypto industry source estimated its chances of passage at 15% to 25%, while Galaxy estimated the chance of passing market structure legislation this year at 50%.