A recent joint meeting between the two parties involved intense policy discussions around the Crypto Market Structure Act. According to the meeting documents, the Democratic Party has proposed a series of quite stringent regulatory requirements in the DeFi sector.

First is the front-end compliance issue. The Democrats require DeFi front-ends to be incorporated into sanctions compliance frameworks, meaning that the access layer of decentralized platforms must also adhere to government sanctions list checks. They also want to grant the Treasury Department greater authority to take special measures, further strengthening regulatory oversight over non-centralized DeFi applications.

Regulatory demands also include redefining the classification of crypto assets, introducing new investor protection provisions for crypto ATMs, and enhancing the FTC’s consumer protection powers. The Democrats particularly emphasized anti-avoidance clauses to close loopholes that allow evasion of securities laws through technical means. Additionally, they are considering imposing hard caps on issuer fundraising, limiting it to a maximum of $200 million, with mandatory SEC filings to confirm that the offerings do not constitute securities.

Some thorny issues remain unresolved, including how to regulate stablecoin yields and conflicts of interest, which require further negotiation.

On the Republican side, efforts are underway to push the Senate Banking Committee to review the bill on January 15. However, honestly, whether the two parties can ultimately reach an agreement remains uncertain. While both sides are willing to promote structured regulation of the crypto market, significant disagreements still exist, and many key issues have yet to be clarified.