U.S. Senate disagreements over DeFi developer exemption clause hinder the progress of the crypto bill

DeepFlowTech · 2026-04-09T09:32:27+00:00

The U.S. Senate's digital asset legislation has sparked controversy over the non-custodial software developer protection clause, making it difficult for both parties to reach a consensus. Law enforcement agencies warn that this clause could weaken efforts to combat financial crimes, while the crypto industry strongly supports it. Democratic senators are pushing for amendments, and if no consensus is reached, the bill's progress may be hindered.

DeepFlowTech

2026-04-09 09:32:27

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Deep Tide TechFlow message, April 09, according to Politico, a crypto digital assets bill led by Tim Scott, chair of the U.S. Senate Banking Committee, has sparked controversy over DeFi developer protection provisions, making it difficult for both parties to reach consensus.

The disputed provision would exempt non-custodial software developers that do not control users’ funds, so they would not need to register as money transmitters or comply with anti-money laundering requirements. Law enforcement agencies including the National Sheriffs’ Association and the National District Attorneys Association have sent letters to Congress one after another, warning that the provision would weaken the ability to combat financial crime; Chuck Grassley, chair of the Senate Judiciary Committee, has also voiced similar concerns. The crypto industry views it as the core of the bill, and Amanda Tuminelli, executive director of the DeFi Education Fund, has clearly said she does not accept any changes to the text of the provision.

Democratic Senators Catherine Cortez Masto and Mark Warner are pushing to modify the provision. If the two parties cannot reach consensus, the bill may move forward without Democratic support, affecting the two-party majority needed for a full Senate vote.

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