Cryptocurrency Regulation Competition Intensifies: How the U.S. Senate Prevents Power Rent-Seeking

2026-01-12 20:12:25

The U.S. Congress advances structural reforms in the crypto market, with a key focus on a seemingly lengthy clause—the conflict of interest prevention regulation. According to Punchbowl News, Democratic Congressman Adam Schiff and Ruben Gallego have proposed a protective measure in the Republican-led Responsible Financial Innovation Act, primarily prohibiting government officials from profiting from crypto-related businesses. This ban applies to all public officials, including current President Donald Trump.

Why is this proposal so important? Gallego explicitly states that the related ethical standards are an uncompromisable “red line.” Mishandling this could make it difficult for the entire bill to pass with enough votes in the Senate. This reflects the Democratic Party’s firm stance on the boundary between power and commercial interests, especially as crypto policy becomes a political focal point.

The progress of the Crypto Market Structure Act has not been smooth. Since its review began in the Senate in July, it has been delayed by 43 days due to government shutdowns. To this day, the bill is still moving forward, and its content may involve expanding the U.S. Commodity Futures Trading Commission (CFTC)’s regulatory authority over digital assets, which would directly impact the operation of the entire crypto industry.

Notably, Senator Cynthia Lummis from Wyoming recently announced she will not run for the Senate seat in 2026 and will leave office in January 2027. Lummis has been an early supporter of the bill, and her departure may alter the political balance of the bill in the Senate.

Chairman of the Senate Banking Committee Tim Scott stated this week that the committee expects to hold a markup vote on the bill on Thursday. However, as of the reporting time, no such vote has appeared on the official public calendar. This delay further highlights the complexity of advancing the bill and suggests that behind-the-scenes negotiations are still ongoing.

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