Power shifts from Congress to regulators.
Journalist
Tanzil Akhtar
Journalist
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This week's regulatory developments illustrate a familiar reality in Washington: There is broad agreement that crypto needs rules, but little consensus on how the rules should be written or who should govern them.
That tension was on full display when Senate Judiciary Leaders Chuck Grassley and Dick Durbin voiced concerns over Senate Banking Chairman Tim Scott's proposal for the Crypto Market Structure Act.
Lawmakers have warned that the language would exempt certain blockchain software developers from financial licensing requirements.
In a private letter to Politico, Grassley and Durbin said the provision was properly under the Judiciary Committee's jurisdiction, noting that the sign was postponed before and after it was adopted.
This section closely mirrors the Blockchain Regulatory Certainty Act, a bipartisan proposal led by Senators Cynthia Lammis and Ron Wyden, but its inclusion is now another blip in the already sluggish legislative process.
The Market Structure Bill slips further down the agenda.
Momentum behind the broader market structure bill continues to falter. According to reports, the Senate Banking Committee has delayed work on the bill again, considering it at the end of February or March. Instead, lawmakers are turning their attention to housing legislation in the wake of President Donald Trump's renewed push on affordability.
The delay reinforces a growing concern within the crypto industry: Despite years of debate, market structure reform is vulnerable to political precedence. What was once an emergency now risks being sidelined by competing legislative priorities.
Party cracks began to appear
As the Banking Committee falters, the Senate Agriculture Committee is moving forward, even without Democratic support. Chairman John Boozman said “differences remain on fundamental policy issues” but was willing to move forward regardless, setting a marker for Jan. 27.
If passed, the move would mark a shift from a bipartisan deal to a divisive approach, raising questions about the long-term sustainability of any framework in a divided Congress.
When the legislators stopped, inspectors entered
As Congress struggles, regulators are filling the void. Newly appointed CFTC Chairman Michael Selig this week declared the beginning of a “golden age” for US financial markets, a “future-proof” initiative to reflect decades-old regulations on crypto, blockchain and artificial intelligence.
Patrick Witt, the White House digital assets adviser, has stepped up pressure from another direction, calling for faster passage of the market structure bill. Countering the claim that “no bill is better than a bad bill,” Witt warned that failure to act now could invite more punitive legislation in a future Democratic Congress, especially after the stock market crisis.
Execution pulls back – coordination moves forward
Meanwhile, enforcement trends continue to shift. According to a Cornerstone Research report, SEC crypto enforcement actions have decreased by 60% since the appointment of Paul Atkins as chairman in 2025, indicating a shift away from law enforcement and a more targeted focus on fraud.
That rebalancing was reinforced this week when Atkins and Selig announced that a joint event aimed at harmonizing the regulatory agreement between the SEC and CFTC was a symbolic but meaningful step toward reducing the legal chaos that has long plagued US crypto markets.
The big picture
Taken together, this week's developments point to a clear pattern: legislative paralysis is pushing more responsibility onto regulators. That will depend on whether clarity or further divisive coordination can replace congressional gridlock, and whether lawmakers can still find leadership before agencies issue the rules by default.
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