TechFlow News, April 9: According to Politico, a U.S. Senate Banking Committee bill on digital assets—spearheaded by Committee Chair Senator Tim Scott—is mired in controversy over its provision protecting DeFi developers, making bipartisan consensus difficult to achieve.
The contested provision would exempt non-custodial software developers—who do not control users’ funds—from registering as money transmitters or complying with anti-money laundering (AML) requirements. Law enforcement organizations—including the National Sheriffs’ Association and the National District Attorneys Association—have separately written to Congress warning that this provision would weaken authorities’ ability to combat financial crime. Senate Judiciary Committee Chair Chuck Grassley has likewise expressed similar concerns. The crypto industry views this provision as central to the bill; Amanda Tuminelli, Executive Director of the DeFi Education Fund, explicitly stated that no textual modifications to the provision would be acceptable.
Democratic Senators Catherine Cortez Masto and Mark Warner are pushing for revisions to the provision. If bipartisan agreement cannot be reached, the bill may advance without Democratic support—jeopardizing the bipartisan majority required for passage in a full Senate vote.
