Crypto Market Structure Bill Faces Test Over Political Conflicts

The debate centers on the Responsible Financial Innovation Act (RFIA), a Republican-backed proposal that would reshape how digital assets are regulated in the United States. While the bill is designed to clarify oversight responsibilities across federal agencies, some Democrats argue it leaves too much room for public officials to benefit financially from ties to the crypto industry.

Ethics Concerns Take Center Stage

According to reporting from Punchbowl News, Democratic Senators Adam Schiff and Ruben Gallego have drawn a firm line around ethics provisions. They are pushing for language that would explicitly prevent elected officials — including the US president — from profiting directly or indirectly from crypto companies affected by the legislation.

Gallego described the issue as non-negotiable, signaling that Democratic support hinges on whether these safeguards are included in the final text.

A Bill Delayed by Politics and Timing

The RFIA has been under Senate consideration since July, after passing the House of Representatives under the name CLARITY Act. Progress has been uneven. Lawmakers have debated topics ranging from decentralized finance to regulatory jurisdiction, while a 43-day government shutdown late last year further slowed momentum.

Draft versions released by the Senate Banking and Senate Agriculture committees suggest the bill would grant expanded authority to the Commodity Futures Trading Commission, potentially making it the primary overseer of large segments of the crypto market.

Some analysts believe the approaching 2026 midterm elections could complicate the bill’s prospects, particularly if Democrats frame it as insufficiently tough on ethics and transparency.

Leadership Uncertainty Adds Pressure

Adding another layer of uncertainty, Wyoming Senator Cynthia Lummis, one of the RFIA’s most vocal champions and a key figure on the Senate Banking Committee, announced she will not seek reelection in 2026. Her departure in early 2027 could weaken long-term support for the legislation if it fails to advance soon.

Senate Banking Committee Chair Tim Scott has said a markup of the bill is planned, though no official session had appeared on committee calendars at the time of reporting.

What Happens Next

The RFIA now sits at a crossroads. If Republicans agree to incorporate ethics guardrails, the bill could regain momentum and attract bipartisan backing. If not, Democratic resistance may be enough to keep it from advancing — especially in an election-sensitive environment.

The outcome will likely shape not only crypto regulation, but also how Congress balances innovation with public trust as digital assets move deeper into the financial system.

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