Senate Republicans are advancing comprehensive cryptocurrency trading regulation legislation, but Democratic concerns over Trump and his family's cryptocurrency investments have emerged as the biggest political obstacle to passage.

On September 8, Senate Republicans released a significantly expanded discussion draft of cryptocurrency trading regulation legislation, though they still face major uncertainty in securing crucial Democratic support. According to Republican aides, it remains unclear what concessions would be necessary to gain sufficient Democratic backing.

Even with unanimous Republican support, the legislation requires backing from at least seven Democratic senators to advance. Senate Banking Committee Chairman Tim Scott previously indicated that as many as 18 Democrats might consider supporting the bill, though he acknowledged that opposition within the party represents "real resistance that needs to be overcome."

The latest discussion draft has expanded dramatically from the initial 35-page version released in July to 182 pages, significantly reducing regulatory discretion and bringing it closer to the House version passed in July. While 78 Democratic House members voted for the House bill, Senate resistance has proven stronger, with some Democrats demanding the legislation specifically addresses President Trump and his family's cryptocurrency investments.

**Democrats Focus on Three Key Policy Areas**

According to Republican aides, Democrats have expressed concerns in several critical areas.

First is the funding issue. Democrats have long complained that the Commodity Futures Trading Commission (CFTC), as a smaller financial regulatory agency, cannot charge fees to regulated entities to cover operational costs. The House-passed Clarity Act already includes limited fee provisions.

Second is the representation issue. Democrats are concerned that the CFTC currently has only one commissioner in position (Acting Chair Caroline Pham), and more importantly, they oppose the current lack of any Democratic appointees.

The third focus is vertical integration. In traditional finance, exchanges cannot simultaneously serve as brokers or trade with their own capital on their platforms, but this practice is common in the cryptocurrency world.

**Trump Family Investments Pose Greatest Political Obstacle**

Despite policy-level disagreements, Trump and his family's financial interests in cryptocurrency remain the biggest sticking point. Some Democrats want the legislation to specifically address this issue.

According to Republican aides, there are currently no indications that concessions on the aforementioned policy points would adequately address Democratic concerns about this political issue to secure sufficient votes for the legislation.

Senate staff noted that the digital assets sector currently operates essentially without regulation, and opposing any form of market structure regulation could mean abandoning the creation of regulatory framework in favor of zero regulation.