United States Senator Tim Scott (R-SC), who chairs the Senate Banking Committee and spearheads efforts to pass a digital asset market structure bill, said that certain Democratic Party lawmakers are “standing in the way” of the legislation’s progress.
Speaking at the Wyoming Blockchain Symposium on Tuesday, Scott reportedly said that he believes he can get between 12 to 18 Democrats to vote for his digital asset market structure bill, but that leading Democrats, such as vocal digital currency-critic Senator Elizabeth Warren (D-MA), are hampering progress.
“The forces against it, let me just say it clearly, like Elizabeth Warren, standing in the way of Democrats wanting to participate,” Scott said, as reported by The Block on August 19.
He added that the virulent opposition of such figures as Warren is “a real force to overcome.”
Scott—along with fellow Senate Banking Committee Republicans Cynthia Lummis (R-WY), Bill Hagerty (R-TN), and Bernie Moreno (R-OH)—released a discussion draft of their digital asset market structure bill, also known as the ‘Responsible Financial Innovation Act of 2025,’ on July 22.
The 35-page draft primarily addresses the uncertainty over how to classify various digital assets and which regulator, the Securities and Exchange Commission (SEC) or Commodity Futures Trading Commission (CFTC), has jurisdiction over those assets.
Its provisions include defining an “ancillary asset” to clarify which digital assets are not securities, requiring the SEC to exempt certain offers or sales of ancillary assets from SEC registration, and pressing the regulator to “more clearly define what constitutes an investment contract.”
The draft also directs the SEC to tailor existing requirements to digital asset activity, “so that regulations are no longer outdated, unnecessary, or unduly burdensome in light of the unique technological characteristics of digital assets.”
According to an accompanying press release for the draft bill, it builds on the CLARITY Act, a similar bill already passed by the House of Representatives earlier in July by a vote of 294-134, with 78 Democrats in favor.
If Scott was to get the required Democratic support to pass his Senate bill, it would eventually need to be combined with the House’s CLARITY Act, and a single piece of legislation would be agreed upon. Although in theory, as the Senate draft bill is largely based on the more substantial House bill, this shouldn’t prove an insurmountable task.
Responsible Financial Innovation Act of 2025
The 35-page discussion draft for Scott’s bill is somewhat shorter than the 254-page CLARITY Act on which it builds, but it does outline a number of key changes and looks at “strengthening concepts established” by CLARITY, as well as “expanding on those ideas to further encourage innovation and regulatory clarity for digital assets.”
Key among the issues covered is a reduced role for the SEC, formerly the bane of the digital asset industry under its previous chairman, Gary Gensler. Since President Trump’s pick, Paul Atkins, has taken over as chairman, the regulator has veered from the ‘regulation by enforcement’ approach favored by Gensler and taken a decidedly more lenient stance on the digital asset space.
Despite this, the Senate market structure bill seeks to hand greater responsibility for regulating digital assets to the CFTC.
Another core area of emphasis in the draft was defining ‘ancillary assets’, aka tokens that aren’t securities and thus beyond the SEC’s purview. The SEC would be instructed to exempt or ignore certain offers or sales of ancillary assets, including those whose gross sales proceeds don’t exceed $75 million per year over four years.
The SEC would also be told to tailor existing requirements to digital asset activity, rather than apply “outdated, unnecessary, or unduly burdensome” rules to digital assets.
Other key points in the draft bill include requiring the creation of examination standards for digital assets, encourages private sector entities to partner with federal law enforcement to detect and deter illicit finance, and ensuring financial holding companies can use digital asset systems to offer “any activity, function, product, or service that banks are otherwise authorized by law to perform, provide, or deliver.”
When publishing the draft in July, Scott said, “My colleagues and I in the House and Senate share the same goal: to provide clear rules of the road for digital assets that protect investors, foster innovation, and keep the future of digital finance anchored in America.”
This was echoed by Senator Lummis, who said that the draft “represents a thoughtful, balanced approach that will provide the clarity our innovators need while providing robust consumer protections.”
She added that the market structure legislation “will establish clear distinctions between digital asset securities and commodities, modernize our regulatory framework, and position the United States as the global leader in digital asset innovation.”
These goals also, by-and-large, fit the description of the House of Representatives bill that formed the foundation of the proposals in the Senate draft bill.
CLARITY Act
The CLARITY Act was passed in the House of Representatives during July’s ‘crypto-week’—a week of intensive debate and legislative voting in order to make progress on a number of stalled digital asset-related bills—along with the GENIUS Act, which focuses on stablecoin regulation, and the Anti-CBDC Surveillance State Act.
Much like its subsequent Senate sister bill, chief amongst the CLARITY Act’s priorities was to resolve the longstanding jurisdictional confusion around which digital assets fall under the oversight of the SEC versus the CFTC.
The CLARITY Act would hand the primary responsibility for regulating digital assets to the CFTC, with a lesser role for the SEC.
The SEC would be granted additional jurisdiction over specific forms of digital assets, such as ‘permitted payment stablecoins’ as defined under the GENIUS Act. However, the CFTC would retain authority over stablecoin transactions on a CFTC-registered platform and have primary regulatory responsibility over spot digital commodities.
Among the CLARITY Act other provisions, it exempts secondary distributions of digital assets—the sale of assets by someone who is not the issuer—from being deemed an investment contract, and thus a form of regulated security under the Howey test; and it creates a new category of regulated entity called ‘Qualified Digital Asset Custodians’—to be governed by the CFTC—which would be entities that hold digital assets on behalf of Act-registered persons or entities.
The CLARITY Act currently sits with the Senate, awaiting debate, possible amendments, and eventually a vote.
At some point, it will also need to be married with the Responsible Financial Innovation Act of 2025. However, Senator Scott first had to get the votes for his market structure bill to pass, and time was running out on the self-imposed deadline of September 30, which he laid down at a press briefing in June.
Warren objects
One Democrat that is unlikely to be won over is Senator Warren, who has been calling for stronger rules and enforcement in the digital asset market for years.
At a July hearing of the Senate Banking Committee, Warren emphasized that above all, there was a need for digital asset regulation that reduces the risk of fraud, money laundering, and terrorist financing. In this regard, she argued the proposed Republican legislation left a lot to be desired.
“I’m concerned that what my Republican colleagues are aiming for is another industry handout that gives the crypto lobby exactly its wish list: The blessing of the government’s approval, combined with crypto rules that are weaker than the rules every other financial actor must follow,” Warren said.
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Source: https://coingeek.com/tim-scott-hopes-for-bipartisan-digital-asset-bill-passage/
