Leaders of the US Senate Judiciary Committee are moving to block parts of a Senate crypto market structure bill that protect crypto developers. Committee chair Charles Grassley and ranking Democrat Richard Durbin said the current draft would weaken laws used to prosecute unlicensed money transmitting activity.
In a letter sent Wednesday to Senate Banking Committee leaders, they argued the bill would create gaps in enforcement tied to decentralized digital asset platforms.
Grassley and Durbin said those gaps could attract criminal groups, including cartels and organized networks, to use decentralized systems. They warned that law enforcement already faces difficulty tracking illegal transfers and that the bill would make prosecution harder. The letter was first reported by Politico on Friday.
Focus on Blockchain Regulatory Certainty Act Language
The concern centers on language pulled from the Blockchain Regulatory Certainty Act. A draft released January 12 includes provisions stating that building crypto software or maintaining blockchain networks should not trigger federal or state money transmission rules. Supporters say the change gives legal clarity to developers. Judiciary leaders argue it goes too far and limits the government’s ability to act.
The Judiciary Committee oversees federal criminal law and the Justice Department. Grassley and Durbin said their committee was not consulted before the language was added. They asked Senate Banking leaders to reject any wording that weakens the government’s power to hold parties accountable for running unlicensed money transmission operations.
Legislative Path Faces Delays
The pushback adds to delays already facing the bill. The Senate Banking and Agriculture Committees are leading the effort to define how regulators police crypto markets. Both committees postponed planned markups in recent weeks to secure broader bipartisan backing.
Even if the bill clears both committees, it faces a steep path on the Senate floor. Passage would require 60 votes. That means support from all 53 Republicans plus several Democrats. The Judiciary Committee’s concerns increase the risk of further changes or a longer timeline. Crypto industry backing has also weakened.
One of the largest US based crypto firms and a major lobbyist on digital asset policy, Coinbase, withdrew its support for the bill on Wednesday. The company cited concerns with several provisions but said Friday that talks with lawmakers are still ongoing.