The structure of the Crypto Assets market negotiations has stalled due to the leak of the Democratic Party's DeFi proposal.

[Negotiations on Crypto Assets Market Structure Stalled Due to Leak of Democratic Party DeFi Proposal] According to Crypto In America, negotiations between Senate Republicans and Democrats on legislation regarding Crypto Assets market structure have stalled after the Democratic Party submitted a new Decentralized Finance regulatory proposal that sparked strong opposition from the industry. On Wednesday evening, Democratic staffers sent a document titled "Preventing Illegal Financing and Regulatory Arbitrage through Decentralized Finance Platforms" to Republican staffers of the Senate Banking Committee, which listed some suggestions on how to regulate DeFi. The document was quickly leaked to the industry, and within hours, members of the Crypto Assets community began frantically calling each other and contacting Republican offices to verify the contents they had read. The content of this document establishes broad rules for regulating Decentralized Finance, categorizing anyone who designs, deploys, operates, or profits from a front-end interface (website) as an intermediary. The industry calls its scope overly broad, disconnected from the principles of DeFi, and potentially stifling the decentralized ecosystem in the United States, forcing software developers to move overseas and diverting users to centralized platforms. Critics, including Jake Chervinsky of the Variant Fund, argue that the proposal grants government regulators unchecked power, raises issues related to the First and Fourth Amendments, and could trigger a wave of endless litigation. Furthermore, the proposal stands in stark contrast to the Republican draft released last month. The Republican draft includes provisions to protect self-custody rights and software developers, and has garnered widespread support from the DeFi community. Both sides are blaming each other, and it is still unclear who will compromise first: will the Democrats agree to set a target date, or will the Republicans return to the negotiating table? The longer the deadlock drags on, the more likely it is that the bill will be delayed until it reaches President Trump's desk in 2026, when Congress will inevitably turn its attention to the midterm elections, leaving Crypto Assets policy sidelined. Moreover, half of the bill's content is still unfinished.