The cryptocurrency industry is attacking a Senate banking bill backed by President Donald Trump’s allies, warning it grants Treasury unprecedented surveillance powers that contradict the administration’s promise to make America the “crypto capital of the world.”
Galaxy Digital released an analysis on Tuesday, quoted by The Block, calling the Senate Banking Committee’s Digital Asset Market Clarity Act the biggest expansion of financial surveillance since the PATRIOT Act. The committee held a markup session on Wednesday on the legislation.
The Senate draft lets Treasury and federal agencies order crypto firms to freeze transactions for 30 days without court approval. Firms that comply receive legal immunity. The House version that passed 294-134 in July contains no such provision.
The bill extends sanctions and anti-money laundering rules to blockchain front ends — web interfaces that users need to access decentralized finance protocols. Treasury gains power to force these platforms to screen wallets and block sanctioned activity.
Senate Democrats drive the enforcement provisions, creating awkward politics for Republicans who campaigned on crypto-friendly policies. Senate Banking Committee Chairman Tim Scott defends the bill as necessary to combat money laundering while establishing regulatory clarity.
The legislation needs 60 Senate votes, requiring seven to 10 Democrats to join Republicans. More than 137 amendments await debate.
Galaxy Digital’s Alex Thorn wrote that the bill exceeds post-September 11 surveillance authorities. Industry representatives are split between firms accepting stronger enforcement for regulatory clarity and those warning that the measures will drive businesses offshore.
The Senate Agriculture Committee postponed its companion markup to late January. That bill addresses the Commodity Futures Trading Commission oversight of digital commodities.
The legislation attempts to divide jurisdiction between the Securities and Exchange Commission and CFTC — a distinction that has shaped enforcement actions throughout the Biden administration.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
