Eleanor Terrett

🚨NEW: Interesting tidbit from Senator @MarkWarner (D-VA) just now that suggests there may have been some movement in Democrat/GOP negotiations over the remaining DeFi/BRCA sticking points. Warner said further bipartisan negotiations took place this morning and that Republicans *accepted* some proposed changes. Could signal that at least some Democrats may now be open to voting in favor of the bill after all. We will see. 👀

🚨GM! Big day for crypto on Capitol Hill. You can watch the markup live on @BankingGOP X account starting at 10:30 AM EST. A small update since last night: The 5 pro-crypto Banking Committee Dems gathered this morning to figure out final direction on how to vote in today’s markup after negotiations with GOP colleagues fell through last night, according to three sources. However, hearing it’s likely going to be a collective vote against, driven largely by disagreements over the BRCA after @CortezMasto pushed for changes following support from law enforcement groups this week for her amendments. After everything we heard about ethics this week, it no longer appears to be the central sticking point. Instead, the focus seems to have shifted to whether Democrats believe the Grassley-Lummis backed BRCA compromise goes far enough to address law enforcement concerns. As always, nothing is final until it happens, so we’ll see what the next few hours bring.

Chairman @SenatorTimScott on GOP efforts to make the bill bipartisan: “Since June of last year, we have added 33,000 words and 219 pages to get this legislation as bipartisan as humanly possible.”

🚨 WATCH: Chairman @SenatorTimScott leads the Senate Banking Committee in a historic markup of the CLARITY Act, legislation to establish clear rules of the road for digital assets. twitter.com/i/broadcasts/1…

🚨GM! Big day for crypto on Capitol Hill. You can watch the markup live on @BankingGOP X account starting at 10:30 AM EST. A small update since last night: The 5 pro-crypto Banking Committee Dems gathered this morning to figure out final direction on how to vote in today’s markup after negotiations with GOP colleagues fell through last night, according to three sources. However, hearing it’s likely going to be a collective vote against, driven largely by disagreements over the BRCA after @CortezMasto pushed for changes following support from law enforcement groups this week for her amendments. After everything we heard about ethics this week, it no longer appears to be the central sticking point. Instead, the focus seems to have shifted to whether Democrats believe the Grassley-Lummis backed BRCA compromise goes far enough to address law enforcement concerns. As always, nothing is final until it happens, so we’ll see what the next few hours bring.

🚨NEW: Negotiations between a small group of bipartisan senators aimed at getting Democrats to a better place on at least two outstanding Clarity Act issues wrapped for the night without a deal, I’m told. In a statement, one of the lead GOP negotiators, @SenLummis, said: “Ultimately, we have agreement on 99% of the bill. I hope my colleagues across the aisle will work with me to get the remaining 1% resolved after we pass this bill out of committee. Otherwise, when or if another FTX happens, we will have no one to blame but ourselves.” Democrats like @SenAdamSchiff and @SenRubenGallego had been pushing to reach a compromise on ethics/conflicts of interest involving the First Family ahead of tomorrow’s markup as a condition of their support for the bill, while other Democrats voiced eleventh-hour concerns about provisions tied to the Blockchain Regulatory Certainty Act (BRCA), which would prevent non-custodial software developers from being prosecuted under money transmitter laws. It’s my understanding that meaningful progress was made on ethics, but last minute disagreements over BRCA changes ultimately prevented a deal from coming together. Of course, it’s still unclear how the five pro-crypto Democrats on the Banking Committee will ultimately vote tomorrow, but as of now, the expectation is that the markup will be partisan.

DEF is tracking anti-DeFi amendments. Ahead of the Senate Banking Committee markup of the Clarity Act, Senators submit amendments to be considered and voted on. Importantly, not every amendment will be considered, which means we have a timely opportunity to urge Senators to oppose amendments that could harm DeFi technology, developers, and users. Here are the amendments you should ask your Senators to oppose*: ➡️ Amendment #16, Senator Cortez Masto. [Re-writes the BRCA to turn it from a shield to a sword against developers] ➡️ Amendment #17. Senator Cortez Masto. [Strikes protections for non-controlling developers in Section 302] ➡️ Amendment #22, Senator Cortez Masto. [Strikes protections for non-controlling developers in Section 301] ➡️ Amendment #24, Senator Kim. [Expands the definition of a “financial institution” in 31 USC 5312 to include digital asset businesses] ➡️ Amendment #27, Senator Kim. [Expands BSA/AML obligations and certification requirements for "covered businesses" to “prevent illicit finance” through decentralized financial services platforms] ➡️ Amendment #32, Senator Van Hollen. [Expands application of criminal code to DeFi developers who publish, distribute, deploy, administer, or constitute code that “facilitates” crime or who act with “reckless disregard for a substantial risk” the DeFi trading protocol is used in connection with a violation of 1956, 1957, 1960, or 2339C] ➡️ Amendment #33, Senator Van Hollen. [Prohibits publishing, distributing, deploying, or constituting a DeFi trading protocol “for the purpose of facilitating” a violation of 1956, 1957, 1960, or 2339C] ➡️ Amendment #67, Senator Warren. “...would exempt certain software developers identified in the White House digital assets report and address vulnerabilities to protect national security” ➡️ Amendment #69, Senator Warren. “...would define financial institutions under anti-money laundering law” ➡️ Amendment #70, Senator Warren. “...would establish tailored anti-money laundering and countering the financing of terrorism responsibilities for certain DeFi front-ends” ➡️ Amendment #71, Senator Warren. “...would establish tailored anti-money laundering and countering the financing of terrorism responsibilities for certain DeFi businesses” ➡️ Amendment #72, Senator Warren. “...would establish tailored anti-money laundering and countering the financing of terrorism responsibilities for certain DeFi businesses” ➡️ Amendment #73, Senator Warren. “...would close the tokenization loopholes” ➡️ Amendment #89, Senator Reed. [Direct attack on Van Loon - 5th Circuit federal court decision - by subjecting smart contracts to sanctions “without regard to whether such contracts operate autonomously, can be modified, or are owned”] ➡️ Amendment #92, Senator Reed. [Expands the application of the BSA by broadening the definition of "financial institution" to include digital asset companies and developers] ➡️ Amendment #94, Senator Reed. [Eliminates BRCA from Clarity Act] *The amendment text is not yet public. Bracketed language is DEF’s description based on text the DEF team reviewed; language in quotes is the Senators’ original description, which suggests a threat to DeFi. The DEF team will keep track of these amendments during Thursday’s markup, and will share updates on X. Stay tuned!