Crypto Leaders and Lawmakers Clash Behind Closed Doors Over DeFi Rules

TLDR:

• Lawmakers and crypto executives met privately in Washington to push stalled crypto market structure legislation forward.
• White House Crypto Czar David Sacks told senators the administration wants the bill passed before year-end.
• Heated exchanges over DeFi leaks and partisan tactics briefly disrupted otherwise productive sessions.
• Both parties agree DeFi rules must focus on intermediaries rather than blockchain protocols to protect innovation.

A tense day of back-to-back Capitol Hill meetings brought together crypto industry leaders, White House officials, and members of Congress to push forward long-delayed market structure legislation. 

The tone shifted between cautious optimism and open frustration as both parties tried to find common ground. Some senators voiced support for clearer crypto rules, while others warned against politicizing the debate. 

Industry figures, meanwhile, expressed fatigue with stalled talks and growing uncertainty around DeFi regulation. The meetings, reported by journalist Eleanor Terrett, captured a mix of urgency, pressure, and partisan tension.

Crypto Market Structure Takes Center Stage

According to Terrett, the first meeting of the day paired members of the Senate Banking Committee with David Sacks, who now serves as the White House’s Crypto and AI Czar.

Sources said Sacks stressed that passing crypto market structure legislation this year remains a top priority for the administration. Patrick Witt, Executive Director of the White House Crypto Council, joined the session to reinforce that message.

While most Republicans attended, Senator John Kennedy was absent. Lawmakers reportedly discussed timelines for a markup of the bill and possible compromises between House and Senate drafts. 

Industry attendees described the discussion as concise but purposeful, noting that the White House appeared ready to help push the process forward.

Democratic senators later held a separate roundtable with crypto leaders to address public frustration over recent controversies and policy leaks. Senator Kirsten Gillibrand and Senate Majority Leader Chuck Schumer opened the conversation, urging focus and collaboration. 

Several attendees said they appreciated hearing senators acknowledge that crypto could help communities underserved by traditional banking.

However, tensions flared when Senator Ruben Gallego criticized recent online attacks against Democrats and accused Republicans of using the industry for partisan gain. His warning against becoming a “Republican arm” reportedly changed the tone of the meeting, though talks remained mostly cordial afterward.

DeFi Definition Becomes the Flashpoint

The Republican session later in the day drew a smaller group, including Senators Tim Scott, Cynthia Lummis, Ted Budd, and Bernie Moreno. 

Participants said discussions centered heavily on DeFi, specifically how to define and regulate it without stifling innovation. Kennedy, who attended this meeting after missing the earlier one, reportedly engaged actively and pressed for practical answers rather than political gestures.

Attendees agreed that regulating intermediaries rather than blockchain protocols could offer a path forward. Some even suggested a focused, bipartisan working session where lawmakers and industry experts go through the bill line by line. 

While few concrete steps were decided, the sentiment in the room was that everyone wanted the legislation done before year-end.

Despite the ongoing government shutdown, all sides appeared aligned on one thing: the crypto industry needs legal clarity soon. Whether Democrats and Republicans can bridge the remaining gaps before deadlines close remains uncertain. 

But as Terrett’s reporting suggested, the urgency on Capitol Hill is now louder than ever.

The post Crypto Leaders and Lawmakers Clash Behind Closed Doors Over DeFi Rules appeared first on Blockonomi.