Elizabeth Warren and crypto industry unite in 'unlikely alliance' slamming Trump’s bill

An unlikely alliance seems to be forming in the U.S. as two camps, generally lying on the opposite ends of the crypto policy, have found the Donald Trump administration's key legislation lacking in some aspects.

Sen. Elizabeth Warren (D-MA), often very critical of the crypto industry, and the DeFi Education Fund (DEF), a non-profit that is a strong proponent of crypto and DeFi, criticized the Senate's draft legislation for crypto market structure. However, their points of contention, as we will find out, are entirely different.

Related: What is Crypto? Cryptocurrency explained

What is crypto market structure legislation?

Officially known as the “Responsible Financial Innovation Act," the crypto market legislation focuses on entrusting the Securities and Exchange Commission (SEC) to oversee the crypto market.

Sen. Tim Scott (R-SC), Chair of the Senate Banking Committee, along with Senators Cynthia Lummis (R-WY), Bill Hagerty (R-TN), and Bernie Moreno (R-OH), released the draft in July. It introduces a category of “ancillary assets” to distinguish certain crypto assets from securities.

The legislation builds on the CLARITY Act, which the House of Representatives already passed on July 17.

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Elizabeth Warren questions 5 flaws

Senate Banking Democratic members, under Sen. Warren, released a factsheet on Aug. 19 and mentioned five flaws they said they found in the Senate Republicans' draft legislation.

Here are the five objections:

The concept of an “ancillary asset” would shrink the SEC's regulatory oversight. As companies would be able to “self-certify” their offerings as ancillary assets to escape the SEC's scrutiny, it would leave the American public's retirement funds and investments vulnerable to greater volatility without any protections.

If the banking institutions directly engage in crypto activities on behalf of their customers, it increases the risk of a "financial meltdown."

The bill fails to address illicit finance and other national security risks that could arise from malicious actors using crypto exchanges or mixers.

Senator Elizabeth Warren, a Democrat from Massachusetts and ranking member of Senate Banking, Housing, and Urban Affairs Committee, during a confirmation hearing in Washington, DC, US.Getty Images "Crypto now comprises the majority of President Trump’s wealth." The bill fails to address in 'presidential crypto corruption.'

The bill offers weak protection to crypto investors against investment fraud, corporate fraud, market manipulation, and insider trading.

Story Continues ## Crypto industry calls for developers' protection

The DEF issued a letter on Aug. 27 that also criticized the legislation for not offering protection to software developers and non-custodial service providers.

A total of 115 organizations signed the letter, the leading ones among them being:

• a16z
• Anchorage Digital
• Avalanche Foundation
• Chainlink Labs
• Coinbase
• Digital Currency Group
• Galaxy Digital
• Grayscale Investments
• Kraken
• Ledger
• Magic Eden US
• Offchain Labs
• Polygon Labs
• Ripple
• Solana Foundation
• Uniswap Foundation

Developers who write code shouldn't be treated as "money transmitters," they argued.

This story was originally reported by TheStreet on Sep 5, 2025, where it first appeared in the Policy section. Add TheStreet as a Preferred Source by clicking here.

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