Crypto’s U.S. Policy Aims May Pivot on Resistance from Democratic Senator Warner

The lawmaker’s objections over crypto abuses are seen as a major hurdle needing to be cleared before the Senate’s crypto market structure bill can move.

• U.S. Senator Mark Warner, the Virginia Democrat who’s a senior member of the Senate Banking Committee, has emerged as a potential roadblock for crypto industry efforts to get software developer projections into the pending market structure bill.
• The Senate is set to get back to work in Washington next week, and the crypto bill — the sector’s top lobbying priority — is among the leading items on the short-term agenda.

The Senate is set to return to work in Washington next week, with the completion of a crypto market structure bill as one of its top agenda items. In the bipartisan talks over that bill, Warner is said to have held reservations about the approach in the U.S. House of Representatives’ version of the bill known as the Digital Asset Market Clarity Act, which gave developers legal cover, according to three people with knowledge of the negotiation.

Warner, a Virginia Democrat who is the vice chairman of the Senate Select Committee on Intelligence, maintains a close focus on national security issues, and he’s said to have balked at the rampant hacks and money laundering concerns that he’s associated with the decentralized finance (DeFi) end of the crypto sector. In the past, he’s raised objections over reports that cryptocurrency may have been used to move assets to terrorist groups, and he pushed a bill in 2023 that looked to saddle DeFi platforms with the same anti-money laundering (AML) requirements that traditional finance firms must meet — a potentially existential threat to the way the decentralized projects operate without core management.