Catenaa, Sunday, January 18, 2026- Leaders of the Senate Judiciary Committee have pushed back against sweeping cryptocurrency legislation, warning that a proposed exemption for noncustodial software developers could weaken law enforcement oversight.
Sens. Chuck Grassley of Iowa and Dick Durbin of Illinois raised objections in a letter sent Wednesday to Senate Banking Committee leaders after draft bill text included the Blockchain Regulatory Certainty Act.
The provision seeks to clarify that software developers who do not control user funds are not classified as money transmitters.
Grassley and Durbin said the Judiciary Committee was not consulted before the draft was released, despite its jurisdiction over federal criminal law and oversight of the Justice Department, the FBI, and the Department of Homeland Security.
The Banking Committee bill, released Monday January 12, spans more than 270 pages and seeks to divide regulatory authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
It also introduces new disclosure rules and sections addressing decentralized finance.
More than 70 amendments were filed ahead of a planned markup, reflecting deep divisions among lawmakers and industry participants. Tensions escalated after Coinbase Chief Executive Brian Armstrong withdrew support for the bill, citing concerns tied to tokenized equities, DeFi provisions, stablecoin rewards, and the SEC’s role.
Judiciary leaders warned that the developer exemption could limit access to financial data used by state and local authorities in money laundering, terrorism, and trafficking cases.
A Banking Committee spokesperson said the provision falls within its jurisdiction, citing guidance from the Senate parliamentarian.
The dispute adds uncertainty to the bill’s path as leaders seek bipartisan support needed for a Senate floor vote.
