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

According to Politico, the cryptocurrency asset bill led by Senate Banking Committee Chairman Tim Scott is embroiled in controversy over the DeFi developer protection clause, making bipartisan consensus difficult to achieve.

The controversial clause 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 clause 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 explicitly stating that no modifications to the clause text will be accepted. Democratic Senators Catherine Cortez Masto and Mark Warner are pushing for amendments to the clause. 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.