DeFi Education Fund Urges Senators To Reject Proposed Amendments In Crypto Bill Markup

bitcoinistPublished on 2026-01-15Last updated on 2026-01-15

Abstract

The DeFi Education Fund is urging the Senate Banking Committee to reject specific proposed amendments to a new crypto market structure bill, warning they could harm the DeFi ecosystem and software developers. Key concerns include #42 (Reed, Kim), authorizing Treasury to sanction smart contracts; #45 (Reed), creating a new digital asset definition under the Bank Secrecy Act; and #47 (Reed), removing a provision on unlicensed money transmission. Amendments #72 and #73 (Cortez Masto) aim to narrow developer definitions and expand FinCEN's authority, while #74 and #75 could stifle growth by prohibiting transactions with unlawful protocols. Amendment #104 (Warren) would strike a key distribution carve-out for crypto. The fund argues these changes pose significant risks to innovation and operational flexibility in the decentralized finance space.

As the Senate Banking Committee prepares to mark up the newly proposed draft of the crypto market structure bill, the DeFi Education Fund has released a list of amendments it strongly urges senators to oppose.

In a recent post on social media platform X (formerly Twitter), the organization expressed concerns that the descriptions of the draft indicate potential harm to decentralized finance (DeFi) and could negatively impact software developers.

Red Flags Emerge From Crypto Market Structure Bill Draft

In its message, the DeFi Education Fund emphasized the importance of safeguarding the integrity of the emerging DeFi landscape and called on senators to consider the far-reaching consequences of these proposed changes.

Among the amendments highlighted were Amendment #42, proposed by Senators Reed and Kim, which seeks to authorize the Treasury to sanction smart contracts and centralized platforms involved in illicit activities.

This amendment raised significant red flags for advocates who worry about its implications for innovation and operational flexibility within the decentralized finance ecosystem.

Another amendment of concern, Amendment #45 by Senator Reed, aims to create a specific definition for digital assets under the Bank Secrecy Act.

Similarly, Amendment #47, also from Senator Reed, intends to remove a provision related to federal criminal offense concerning unlicensed money transmission.

These changes, according to the DeFi Education Fund, loom dangerously over the operational landscape for developers and financial institutions that interact with digital assets.

Stifling DeFi Growth

Additionally, Senators Cortez Masto’s proposed amendments, specifically #72 and #73, aim to narrow the definition of non-controlling developers and expand the authority of the Financial Crimes Enforcement Network (FinCEN) alongside the Treasury for blockchain-enabled platforms.

Amendments #74 and #75 further seek to strengthen existing laws related to money transmission and prohibit transactions involving unlawful DeFi protocols, which the Fund suggests could stifle the industry’s growth.

Amendment #104, proposed by crypto-skeptic Senator Elizabeth Warren, also drew attention by striking a key distribution carve-out for crypto offerings.

This follows similar calls by Summer Mersinger, CEO of the Blockchain Association, who recently claimed that the “Big Bank Lobby” is pushing Congress to change key provisions of the already enacted GENIUS Act concerning stablecoin rewards, further highlighting the current state of the future of crypto in Congress.

The daily chart shows the total crypto market cap recovery above $3.2 trillion. Source: TOTAL on TradingView.com

Featured image from DALL-E, chart from TradingView.com

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