The U.S. Senate has disagreements over the DeFi developer exemption clause, hindering the progress of the cryptocurrency bill

According to Politico, the cryptocurrency asset bill led by Senate Banking Committee Chairman Tim Scott has become controversial due to provisions protecting DeFi developers, making bipartisan consensus difficult to achieve.

The controversial provision aims to exempt non-custodial software developers who do not control user funds from registering as money transmitters or complying with anti-money laundering requirements. Law enforcement agencies such as the National Sheriffs' Association and the National District Attorneys Association have sent letters to Congress warning that this provision would weaken the ability to combat financial crime; Senate Judiciary Committee Chairman Chuck Grassley has also expressed similar concerns. The cryptocurrency industry views this as the core of the bill, with DeFi Education Fund Executive Director Amanda Tuminelli clearly stating that no modifications to the text of the provision will be accepted. Democratic Senators Catherine Cortez Masto and Mark Warner are pushing for amendments to the provision. If the two parties fail to reach a consensus, the bill may advance without Democratic support, affecting the bipartisan majority needed for a full Senate vote.