Senate Crypto Bill Targets Mid-May Markup Amid Ethics Disputes

The U.S. Senate is targeting a mid-May markup for broad crypto market structure legislation, according to Senator Thom Tillis (R-N.C.), who told FOX Business on Wednesday that he has asked Senate Banking Committee Chair Tim Scott (R-S.C.) to “move forward with scheduling” a hearing to amend and vote on the bill. However, key disputes remain unresolved, including how to address ethics concerns tied to President Donald Trump’s crypto interests, threatening to derail the legislation’s path forward.

Legislative Timeline and Key Negotiators

Tillis said he hopes to have fresh legislative text a few days ahead of the mid-May markup, according to The Block. Chair Scott reinforced the timeline in a Thursday interview with Fox Business, stating lawmakers were in the “red zone” to pass a bill and expressing hope for a bipartisan markup in May, with a full Senate floor vote expected in June or July. “I just want to have 13 of 13 Republicans,” Scott said, adding that “that makes it easier for us to have a bipartisan markup in May is my hope.”

Sen. Angela Alsobrooks (D-Md.), another key negotiator, emphasized through her spokesperson Meredith Happy that “if we want a bipartisan vote, we have to resolve illicit finance and ethics.”

Main Obstacles: Stablecoin Rewards, Ethics, and DeFi

The bill has been stalled in the Senate Banking Committee for several months over disputes on stablecoin rewards treatment, which has been the primary blocker alongside ethics and decentralized finance (DeFi) concerns. The legislation would broadly regulate the crypto industry by designating regulatory jurisdictions between the Commodity Futures Trading Commission and the Securities and Exchange Commission. The House passed a similar version, called “Clarity,” last year.

The Senate Banking Committee has been trying to resolve how to address stablecoin rewards, with disputes evolving between a White House crypto advisor and banks. DeFi has also come into focus amid concerns that bill language could weaken prosecutors’ ability to pursue financial crimes.

The Ethics Dispute and Trump Crypto Ties

Tillis drew a line on ethics last week, telling Politico that he would “oppose the crypto bill if it did not include ethics language before it leaves the Senate.” However, Chair Scott has said he does not believe ethics provisions fall under his committee’s jurisdiction, leaving unclear where such provisions would be addressed before a full Senate floor vote.

Ethics has become increasingly central as midterm elections approach, with Democrats expected to highlight the crypto industry’s lobbying and the Trump family’s crypto connections in their campaigns. No Democrats in the Senate Agriculture Committee voted yes for that committee’s version of the crypto bill earlier this year, citing Trump’s crypto interests as a major obstacle.

According to Bloomberg, Trump has made at least $1.4 billion from his crypto ventures, including from DeFi and stablecoin project World Liberty Financial. The Trump family also holds a 20% stake in mining firm American Bitcoin. Last weekend, Trump hosted a gala luncheon at his Mar-a-Lago estate in Florida for holders of the TRUMP memecoin, raising concerns from Democrats.

Sen. Elizabeth Warren (D-Mass.), the top Democrat on the Senate Banking Committee, recently raised conflict-of-interest concerns during a hearing on Federal Reserve Chair pick Kevin Warsh, who has notable crypto holdings. “Having a sock puppet in charge of the Fed would also give the president access to the Fed’s powerful authorities to enrich himself, his family and his Wall Street buddies,” Warren said, adding it “could mean granting special accounts to his family’s crypto company or bailouts to his friends on Wall Street if they get into trouble.”

The House version of the bill includes a provision prohibiting “any member of Congress or senior executive branch official from issuing a digital commodity during their time in public service.”

Republican Support Fracturing

On Thursday, Sen. John Kennedy (R-La.) said he would withhold support for crypto legislation, in part because of “deep frustrations with the House and White House over a stalled Senate housing bill,” according to Punchbowl News. This complicates the path to passage, as 60 votes are needed in the Senate, likely requiring all Republicans and some Democrats to be on board.

Passage Prospects

One crypto industry source estimated the bill’s chances of passage at just 15% to 25%, citing the combination of unresolved stablecoin rewards, ethics, DeFi, and dwindling floor time to vote. Galaxy last week estimated the chance of passing market structure legislation this year at 50%.