Nikolas Sargeant
A Senate Banking Committee hearing intended to explore "bipartisan legislative frameworks for digital asset market structure" saw notably low attendance on Tuesday, with only five of the subcommittee's 11 senators present to question former regulators and industry experts. The sparse turnout highlighted growing partisan tensions over crypto regulation as lawmakers grapple with concerns about potential conflicts of interest involving the Trump administration's ties to the digital asset industry.
Former CFTC Chair Rostin Behnam, who testified at the hearing, had previously warned that the regulator's current approach was "not sustainable" without addressing regulatory gaps for cryptocurrencies. In his prepared testimony, Behnam emphasized the need for market structure requirements focusing on customer protections, conflict avoidance, and market resiliency, warning that inaction would only increase risks to financial markets through fraud, manipulation, and corruption.
Subcommittee Chair Cynthia Lummis acknowledged the low participation, attributing it partly to "competing committees" but also suggesting deeper political dynamics at play. The Wyoming Republican noted concerns that "certain people that have family members in the administration are going to be advantaged" by crypto legislation, alluding to President Trump's family connections to World Liberty Financial, a stablecoin issuer. Only one Democrat, Senator Angela Alsobrooks, attended the hearing, sitting in for ranking member Ruben Gallego.
The hearing comes as both chambers of Congress work on separate crypto market structure bills, with the House's CLARITY Act already moving through committee and the Senate having recently passed the GENIUS stablecoin bill. However, some Democrats continue to oppose crypto legislation without provisions addressing Trump's industry ties, creating uncertainty about the bipartisan support needed for comprehensive digital asset regulation despite the urgent need for regulatory clarity in the rapidly evolving sector.
