Senate Banking Committee Chairman Tim Scott reportedly predicts that 12 to 18 Democrats will support comprehensive crypto market structure legislation.

According to Aug. 19 reports, Scott is conducting individual meetings with Democratic members, including those outside the Banking Committee, to build bipartisan backing for the anticipated September bill introduction.

The South Carolina Republican’s outreach efforts follow the House passage of the Digital Asset Market Clarity Act on July 17, which received support from 78 Democrats in a 294-134 vote.

The House legislation establishes jurisdictional boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission while creating registration pathways for qualifying digital asset platforms.

Scott released a discussion draft of the Responsible Financial Innovation Act of 2025 on July 22 alongside Senators Cynthia Lummis, Bill Hagerty, and Bernie Moreno.

The Senate proposal builds upon the House CLARITY Act by introducing ancillary asset definitions, modernized disclosure requirements, and banking provisions that allow financial holding companies to offer digital asset services.

Regulatory framework development

The CLARITY Act directs SEC and CFTC coordination through joint registration processes for platforms listing tokens that meet functional decentralization tests and public float requirements.

Qualifying networks fall outside the securities law scope once they achieve sufficient decentralization metrics.

The legislation establishes token disclosure requirements scaling with market capitalization tiers while requiring issuers conducting US sales to submit initial information statements.

Banking supervisors receive instruction to recognize qualified custodians managing both stablecoins and digital assets under unified segregation and audit standards.

The framework creates coordinated custody requirements for platforms operating spot and derivatives trading under shared regulatory oversight between the two primary federal agencies.

The Senate discussion draft expands these provisions through ancillary asset classifications covering digital tokens that avoid securities designation.

Regulation DA would exempt certain ancillary asset sales from registration requirements for annual proceeds under $75 million, capped over four-year periods.

The proposal refined investment contract definitions under federal law while establishing pre- and post-launch transparency requirements for digital asset issuers.

Senator Lummis emphasized the urgency of regulatory clarity to prevent American innovation migration overseas, stating the legislation will establish clear distinctions between digital asset securities and commodities while modernizing regulatory frameworks.

Senator Hagerty noted that outdated laws and regulatory uncertainty have hindered innovation and left consumers without adequate protections.

Lastly, the Banking Committee issued a Request for Information covering more than 35 topics to support rulemaking processes, with public comments informing final legislation development.

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Ripple Labs has urged the US Senate to revise its proposed crypto legislation, warning that the current draft introduces more confusion than clarity.

The blockchain firm submitted its response on Aug. 5, addressing concerns about regulatory overreach and vague definitions that could stifle innovation across the digital asset space.

The comments come in response to the Senate’s call for feedback on the draft of the Responsible Financial Innovation Act of 2025, which was released on July 22.

The bill aims to modernize crypto oversight by expanding regulatory tools, improving consumer protections, and providing clearer classification rules for digital assets.

Ripple highlight concerns

One of Ripple’s key concerns is the bill’s treatment of “ancillary assets,” a vague term that could place many digital tokens under SEC jurisdiction.

The company warns that this could lead future SEC leadership to interpret the regulations loosely, potentially enforcing policies that undermine the growth of the crypto space.

According to the firm:

“This approach could subject long-established, widely traded tokens operating on open and permissionless networks, including ETH, SOL, and XRP, to perpetual SEC oversight, even when current or future transactions bear none of the hallmarks of a securities offering.”

Moreover, Ripple emphasized that assets tied to past investment contracts should not be perpetually subject to SEC jurisdiction.

The company argues that the SEC’s authority should be limited to the specific transaction in question, not extended to future trades of the asset.

The firm noted:

“The approach taken by the draft provides a backdoor to assert jurisdiction over present-day transactions based on conduct that is either irrelevant to the transaction at issue or barred from enforcement by fundamental legal protections.”

Considering this, Ripple proposed a fixed time period for SEC jurisdiction over tokens initially sold as part of an investment contract.

The company also called for Congress to clarify the application of the Howey Test, a standard used to determine whether an asset is a security, ensuring it is consistently applied without leaving room for subjective interpretations that could destabilize the market.

It added:

“If Congress intends to codify the Howey test, it should do so in a way that prevents misuse or manipulation by the SEC.”

Calls for legal clarity

In addition to concerns over SEC powers, Ripple urged lawmakers to provide clear guidelines on which blockchain activities, such as staking, mining, and governance, should be regulated as securities.

The company argued that uncertainty surrounding these activities could discourage innovation and hinder the broader adoption of blockchain technologies.

It stated:

“To avoid misapplication of the Howey test, it should be explicitly stated that ‘entrepreneurial or managerial efforts’ do not include core network functions or routine administrative services.”

Meanwhile, Ripple also supported a provision in the bill aimed at protecting tokens actively traded for at least five years, suggesting it could offer protection from retroactive enforcement.

The RLUSD issuer believes this would provide more predictability and stability for established digital assets while helping the industry move forward confidently.

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Crypto Journalist

Amin Ayan

Crypto Journalist

Amin Ayan

About Author

Amin Ayan is a crypto journalist with over four years of experience in the industry. He has contributed to leading publications such as Cryptonews, Investing.com, 99Bitcoins, and 24/7 Wall St. He has…

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August 2, 2025

The DeFi Education Fund (DEF), a policy advocacy group backed by an early Uniswap grant, has called on the US Senate Banking Committee to take a more measured approach to DeFi regulation.

In a formal response to the draft Responsible Financial Innovation Act of 2025 (RFIA), DEF and a coalition of top crypto firms outlined a framework they believe can safeguard innovation without undermining national security or consumer protections.

The response was co-signed by a16z Crypto, Jito Labs, Jump Crypto, Paradigm, Multicoin Capital, Solana Policy Institute, Uniswap Foundation, Uniswap Labs, and Variant Fund.

DEF Calls for Clear DeFi Rules, Developer Protections in Senate Response

The DEF’s response pushes for four key pillars, including distinguishing between DeFi developers and intermediaries, defining which entities are required to register with federal authorities, setting decentralization criteria, and ensuring technology-neutral rulemaking.

These suggestions come amid the Senate’s call for public feedback on the RFIA, which builds on the earlier CLARITY Act.

Lawmakers say they aim to strike a balance between market growth and financial oversight, but DEF argues that a nuanced understanding of decentralized systems is essential.

One of the more urgent issues raised in the letter involves the ongoing federal case against Tornado Cash developer Roman Storm.

DEF criticizes current FinCEN guidance used in the prosecution, warning that treating non-custodial software code as a financial service sets a dangerous precedent.

“Software that does not take custody or control should not be regulated as an intermediary,” DEF states, urging legislative clarification.

The coalition also emphasized the need for federal preemption to override conflicting state laws.

According to DEF, without preemption, well-funded traditional financial players could exploit state-level loopholes to target DeFi developers and suppress emerging competition.

Andreessen Horowitz Flags Gaps in Draft Crypto Bill

On Thursday, Andreessen Horowitz (a16z) also urged US lawmakers to revisit and revise the draft crypto regulation bill, warning that the current proposal could open legal loopholes and weaken investor protections.

While the draft seeks to clarify the regulatory landscape for digital assets, a16z argues that the framework as written poses legal and structural risks, especially around the treatment of “ancillary assets.”

Ancillary assets refer to digital tokens sold alongside investment contracts, typically without providing buyers with equity, dividends, or governance rights.

a16z said using this category as the foundation for new legislation “without significant modifications” is problematic.

The firm believes this structure contradicts the Howey test, which is the longstanding legal standard for determining whether an asset qualifies as a security under U.S. law.

“Rewriting Howey,” the letter stated, “would depart from settled law and endanger investor protections.”

Instead, a16z supports the CLARITY Act’s narrower definition of “digital commodities” and recommends codifying a control-based decentralization model.

This would assess whether any party retains unilateral control, operational, financial, or governance, over a blockchain system.

According to the firm, decentralization should mark the point at which an asset transitions from a security to a commodity.

Crypto Journalist

Amin Ayan

Crypto Journalist

Amin Ayan

About Author

Amin Ayan is a crypto journalist with over four years of experience in the industry. He has contributed to leading publications such as Cryptonews, Investing.com, 99Bitcoins, and 24/7 Wall St. He has…

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July 28, 2025

A group of Senate Democrats is demanding answers from the head of the Federal Housing Finance Agency (FHFA) over a controversial move to consider crypto assets in mortgage assessments.

In a letter sent Friday, five senators led by Jeff Merkley raised concerns about FHFA Director William Pulte’s recent directive instructing Fannie Mae and Freddie Mac to explore how crypto holdings could factor into mortgage risk evaluations without being converted into US dollars.

The letter, co-signed by Senators Elizabeth Warren, Chris Van Hollen, Mazie Hirono, and Bernie Sanders, calls for a detailed explanation by August 7.

“We urge you to fully assess the potential risks and benefits of your order and its implications for the U.S. housing market and financial system,” the senators wrote.

FHFA Rules Require Crypto to Be Converted Before Mortgage Use

The FHFA has overseen Fannie Mae and Freddie Mac since the 2008 financial crisis, when both institutions were placed under federal conservatorship.

Under current policy, crypto holdings must be liquidated into fiat before being considered in mortgage applications.

Pulte’s order, however, signals a possible shift. The senators say such a move “could introduce unnecessary risks to consumers and pose serious safety and soundness concerns for the U.S. housing and financial markets.”

They also warned that crypto’s volatility and history of liquidity issues could jeopardize borrowers’ ability to repay loans.

“Borrowers may not be able to exit a crypto position and convert to cash at a price that would allow them to buffer against risk of mortgage default,” they wrote.

Beyond market risk, the senators cited concerns over scams, cyberattacks, and theft, which they say leave homeowners “vulnerable to losing their crypto assets with little hope of recovery.”

The letter also raised potential ethical concerns. “We are concerned about how the FHFA, Fannie Mae, and Freddie Mac will prevent conflicts of interest,” the lawmakers stated, pointing to former President Donald Trump and his family’s involvement in multiple crypto ventures.

The Trumps reportedly have connections to trading platforms, stablecoins, mining businesses, memecoins, and NFTs.

The senators also took direct aim at Pulte, alleging a potential conflict due to his wife’s crypto holdings, which financial disclosures indicate could be worth up to $2 million.

They argue that Pulte’s dual role as FHFA Director and board chair of both Fannie Mae and Freddie Mac is problematic. “You have stacked those boards with industry allies,” the letter said.

Senators Slam FHFA for Lack of Clarity on Crypto Mortgage Order

The lawmakers criticized the lack of transparency surrounding the order, stating it “includes no information on how Fannie Mae and Freddie Mac would develop a proposal” or how the FHFA would assess risks or collect feedback.

They referenced the 2023 banking crisis, where crypto exposure contributed to the collapse of three banks, as a cautionary tale.

They also noted that in 2021, Fannie Mae concluded that crypto use for deposits, payments, or collateral was the “least appealing application” of blockchain.

The senators asked Pulte to provide internal communications related to the order, details on the approval process, and information on how he plans to address potential conflicts of interest.

The Senate Agriculture Committee will consider President Donald Trump’s nominee for chair of the Commodity Futures Trading Commission, Brian Quintenz, as lawmakers weigh a broader shift in crypto regulation that could dramatically expand the agency’s role.

The committee is scheduled to review Quintenz’s nomination during a July 21 hearing, ahead of a full Senate vote regarding his appointment expected next week.

His confirmation would come at a pivotal moment as Congress debates the Digital Asset Market Clarity (CLARITY) Act legislation. The legislation aims to establish a clear regulatory framework for the digital asset industry and designate a primary supervisor.

Quintenz, a former CFTC commissioner, may have to lead the agency alone. Acting Chair Caroline Pham and Commissioner Kristin Johnson are both anticipated to depart by the end of 2025, and no additional nominations have been announced.

The CLARITY Act, which passed the House on July 17 with bipartisan support, proposes a regulatory framework that would designate the CFTC as the lead watchdog for most digital commodities, including crypto.

Its future in the Senate remains uncertain, with possible amendments and political divisions still in play. Senate Banking Committee leaders have expressed interest in moving the bill forward before October, though no formal vote has been scheduled.

If passed, the legislation could recalibrate the balance of power between the CFTC and the SEC, the nation’s two primary financial regulators.

While the crypto industry has largely backed the bill as a step toward clearer oversight, regulatory leadership changes may complicate implementation.

The CFTC’s existing leadership has signaled support for the proposed reforms, emphasizing the agency’s readiness to adapt.

Should Quintenz be confirmed without further appointments, he may find himself guiding the CFTC through one of the most consequential shifts in its history without additional support.

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As Republicans rush to pass President Donald Trump’s “One Big Beautiful Bill” budget plan, a timely initiative is emerging in Congress that puts cryptocurrency in the spotlight once more.

Lawmakers are seeking to attach amendments aimed at providing significant advantages for cryptocurrency investors, contributing to the ongoing shift in the regulatory landscape for digital assets in the country.

Fair Tax Treatment For Crypto Miners And Stakers

On Monday, Senator Cynthia Lummis, an advocate for the adoption of digital assets, took to social media platform X (formerly Twitter), to voice her concerns about the current tax treatment faced by crypto miners and stakers. 

The Senator highlighted that these individuals are taxed twice: once when they receive block rewards and again upon selling their assets. “It’s time to stop this unfair tax treatment and ensure America is the world’s Bitcoin and Crypto Superpower,” Lummis stated.

This sentiment resonates with President Trump, who has consistently supported the integration of digital assets into the country’s financial system. His administration has proposed the establishment of the nation’s first crypto strategic reserve, which would include Bitcoin (BTC) and other tokens as part of its framework.

Fox journalist Eleanor Terret also reported on X that discussions around crypto tax amendments remain alive, despite some disagreements that arose over the weekend. 

Congressional Divisions Toward Digital Assets

Terret indicated that the White House is advocating for the inclusion of Lummis’s proposed changes in the final version of the bill, demonstrating a concerted effort to galvanize support for the cryptocurrency sector.

In contrast to Lummis’s approach, Senator Jeff Merkley introduced an amendment aimed at barring elected officials from promoting or profiting from crypto tokens in which they have a financial interest. 

Merkley argued that allowing such practices undermines the integrity of governance. “The sale of crypto coins by any of us for financial benefit is corrupting our responsibility to govern by and for the people,” he asserted.

Lummis opposed Merkley’s amendment, warning that it could stifle American innovation and hinder the government’s ability to effectively understand and regulate digital assets. 

In a pointed remark in Congress on Monday, the pro-crypto Senator noted, “If we’re serious about ethics and financial products, let’s focus on real solutions and all financial products, not just digital.”

Ultimately, Merkley’s amendment was defeated, failing to pass with a vote of 47 to 53, reflecting the ongoing tensions in Congress regarding the regulation of digital assets, as well as the divisions among lawmakers regarding this emerging technology.

As of press time, Bitcoin trades at $107,187, up 2% on the weekly time frame. Despite the short-term recovery for the market’s leading crypto, BTC still trades 4% below its record price of $111,800.  

Featured image from DALL-E, chart from TradingView.com 

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.

The Congressional Budget Office (CBO) says that the government will have to take on an extra $3.3 trillion in deficits if the White House’s Big Beautiful Bill passes.

In a new report, the non-partisan budget watchdog says that the bill would add $3.9 trillion to the national debt, stemming from roughly $4.5 trillion in net tax cuts and nearly $300 billion in spending increases, partially offset by almost $1.5 trillion in spending cuts.

The CBO also estimates that the bill will increase debt interest costs by nearly $700 billion.

“Even these numbers understate the potential costs of the bill, since the legislation relies on a number of arbitrary expirations. Borrowing could rise by another $1 trillion – to $5 trillion or more – if temporary provisions were made permanent.

The Senate should reject this bill and work toward a fiscally responsible alternative that reduces rather than explodes our high and rising debt.”

Senate GOP leaders are targeting around July 4 to complete the bill’s passage, but progress is uncertain due to internal resistance and looming deadlines.

Earlier this month, billionaire Paul Tudor Jones said that the US government is in a debt trap, and will need to run negative real rates – or set interest rates lower than the rate of inflation, in order to devalue its debt.

Jones says that the “playbook is clear” as far as what the government is going to need to do, giving an edge to investors looking to position themselves.

Besides stocks, he mentions Bitcoin (BTC) and gold as portfolio staples moving forward.

“We’re going to have negative real rates and that’s why you have to think about what is facing our policy makers in this debt trap as you construct your portfolio. So, what would an ideal portfolio be in something like that? Well, what has worked so far? What has worked so far has been some combination of stocks – which won’t do great, which would do terribly if they called us out on the bond market…

But it would be some combination of probably volatility-adjusted Bitcoin, gold, stocks. That’s probably your best portfolio to fight inflation.”

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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