State of Crypto: Market Structure Negotiations?

Negotiations over market structure legislation in the U.S. show signs of contention as industry stakeholders react to proposed regulations for decentralized finance (DeFi). With the government shutdown in its second week, lawmakers are still working on a framework that could define the roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission. A proposal by Senate Democrats aims to classify DeFi projects that interact with customers as brokers, requiring them to register with a federal regulator. Projects deemed 'sufficiently decentralized' would be exempt from oversight. The crypto industry has strongly opposed these recommendations, arguing against the burdensome regulatory framework. As negotiations appear to get increasingly hostile, with significant divides between Republicans and Democrats, the future of any potential market structure legislation remains uncertain. Bipartisan support is necessary to pass the bill, and pessimism is growing about reaching a resolution before Spring 2026. Although the impact of the ongoing shutdown complicates matters, there may still be time for the industry to closely monitor developments regarding this significant piece of legislation.

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