By Rajwa Quasim
Senate Democrats have submitted a counterproposal to Republicans seeking further changes to the Digital Asset Market Clarity Act (DAMCA), putting negotiations over the long-awaited cryptocurrency legislation into another period of uncertainty just hours before a crucial Senate vote.
The Democratic response came late Monday, a day after Senate Republicans circulated what they described as the final version of the bill. The legislation is scheduled for a procedural vote Tuesday. At least 60 senators would need to vote in favor of the bill for it to advance.
Meanwhile, Republicans argued that they have already incorporated a substantial number of requests from their Democratic counterparts. They said the latest version followed 126 significant modifications, including Democratic demands for tighter restrictions on cryptocurrency-related activities involving federal officials. President Donald Trump has also backed the revised ethics provisions in the bill.
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However, Democrats remain dissatisfied with how those restrictions could be enforced. Under the current bill, the U.S. attorney general would have primary responsibility for enforcing restrictions involving government officials. State authorities, however, could not directly sue alleged violators, including the president. Instead, a state attorney general could take the U.S. attorney general to federal court and seek an injunction if the alleged violation harmed the state or its residents.
Democrats argue that the arrangement could make it difficult for state attorneys general to pursue legal action involving senior government officials, particularly if the Office of Government Ethics determines that the activity is permissible.
The bill has also drawn criticism from outside the Democratic-Republican dispute. A bipartisan group of state attorneys general has warned that the legislation could weaken states’ existing authority to take action against cryptocurrency companies. They want states to retain broader powers to pursue cases involving securities and commodities violations.
On Monday afternoon, Democratic lawmakers met to review their counterproposal, with the ethics provisions among the key issues under discussion.
Banking groups have raised separate concerns about provisions governing stablecoins, particularly rewards or incentives offered to holders. The proposed bill would allow the Treasury Department to limit stablecoin custody rewards if it detects a significant outflow of deposits from local banks.
Banking groups fear the provision could encourage customers to move money away from traditional bank deposits, potentially affecting how banks provide loans.
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The Indian Gaming Association has also opposed the proposed changes to the bill. It wants to limit the Commodity Futures Trading Commission’s authority to allow prediction-market companies to offer betting-style contracts on sporting events. A bipartisan group also believes the provision could make it harder for states to take legal action against online scams involving markets overseen by the Securities and Exchange Commission (SEC).
Republican negotiators have signaled that they will not make further changes to the bill. Senator Cynthia Lummis has maintained that the latest draft represents the maximum compromise Republicans can offer.
“Democrats want more. They always want more. […] But this is the best we can do. Our tank is empty,” Lummis said.
White House crypto adviser Patrick Witt said at an event in Washington on Monday that Republicans had already made enough changes to address Democratic concerns, indicating that further revisions were unlikely.
“If there are any changes, we’re talking about punctuation at this point,” he said.