Senate Banking Chairman Tim Scott Gathers Support for Comprehensive Crypto Legislation

By: Eliza Bennet

Senate Banking Committee Chairman Tim Scott, representing South Carolina, is reportedly making significant strides toward gaining bipartisan support for a comprehensive crypto market structure legislation. His efforts come amid discussions surrounding potential regulatory clarity for digital assets. Scott's proactive approach includes conducting individual meetings with Democratic members beyond the Banking Committee to secure bipartisan backing for an anticipated bill introduction set for September. Reports suggest that Scott predicts 12 to 18 Democrats may support this legislation, despite potential protests from figures like Senator Elizabeth Warren.

The legislation, known as the Responsible Financial Innovation Act of 2025, builds on the Digital Asset Market Clarity Act passed in the House on July 17, which saw support from 78 Democrats with a 294-134 vote. The House proposal aims to delineate jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It also establishes registration pathways for digital asset platforms that qualify, striving for a modernized framework that could offer the needed clarity in the sector.

The Senate proposal, co-drafted with Senators Cynthia Lummis, Bill Hagerty, and Bernie Moreno, enhances the provisions of the House version by introducing ancillary asset definitions, modernized disclosure requirements, and banking provisions. These allow financial holding companies to offer an array of digital asset services. The CLARITY Act aims for SEC and CFTC coordination through joint registration processes for platforms listing tokens meeting decentralization and float requirements.

Amid regulatory framework development, qualifying networks could fall outside the scope of securities law upon meeting sufficient decentralization metrics. Additional requirements include token disclosure based on market capitalization and initial information statements for issuers conducting sales in the US. The proposal seeks to refine investment contract definitions and mandate pre- and post-launch transparency for digital asset issuers. As the Senate Banking Committee continues its regulatory efforts, a Request for Information covering over 35 topics was issued to assist in rulemaking, vital for the final legislations' development.