Galaxy Research Director: The two-party talks on the Crypto Market Structure Bill are underway, with Democrats raising concerns about front-end compliance for DeFi.

On January 7th, Galaxy Research Director Alex Thorn shared the latest developments on the crypto market structure bill on the X platform: “Today, a bipartisan meeting was held to discuss the core demands proposed by the Democratic and Republican parties to advance the bill. We reviewed a key document resulting from this meeting. The Democrats’ main demands regarding DeFi include: frontend compliance with sanctions requirements; granting the Treasury Department greater ‘special measures’ authority; and establishing regulatory rules for ‘non-decentralized’ DeFi. Other Democratic demands include: adjusting the classification of crypto assets; introducing new investor protection provisions for crypto ATMs and FTC consumer protection; adding anti-circumvention clauses (to prevent exploiting loopholes to evade securities laws or other regulations); setting a maximum fundraising cap of $200 million for issuers; and requiring protocols to proactively report and clarify to the SEC that they do not constitute securities.” Items still under further discussion include the regulation and handling of stablecoin yields; ethical standards and conflicts of interest. Republicans are pushing the Senate Banking Committee to review the bill next Thursday (January 15). It is currently unclear whether the two parties can reach a consensus to make it a bipartisan bill, as many issues remain unresolved.