Inside the Anti-crypto Memo Keeping Lawmakers on Message

The leaked document suggests giving the SEC total oversight of the crypto industry

article-image

Michael Candelori/Shutterstock modified by Blockworks

share

The crypto industry is up in arms over leaked documents circulated by the Democratic party ahead of Wednesday’s joint House hearing on crypto policy. 

The memo, sent to Democrat House Financial Services Committee members, encourages party members to support the notion of having the SEC be the primary regulator of the crypto industry. 

It’s a suggestion crypto industry members find troubling, as SEC Chair Gary Gensler continues to take an aggressive stance on crypto token classification. Gensler has said he believes “most” cryptocurrencies are securities, although he faced additional criticism when he was unable to confirm ether’s status during an April Hill testimony. 

The memo also encourages Democrats to dispel Republican’s claims that additional regulatory clarity is needed for the crypto space.

“The problem isn’t ambiguity – it’s mass non-compliance with existing laws,” the memo reads, referring to the common industry sentiment that crypto companies do not currently have enough guidance on how to safely operate.

“The US has a regulatory system that has worked well and sustained massive innovation in the financial system for decades,” the memo continues. “We can’t invent new accommodating regulatory structures simply because crypto companies refuse to follow the rules of the road.” 

The language in the document furthers the narrative that Hill Republicans and Democrats are at odds when it comes to oversight over digital assets, Cody Carbone, vice president of policy at the Chamber of Digital Commerce, told Blockworks. 

“The partisanship related to digital policies being elevated by Ranking Member Maxine Waters’ and her staff as it is extremely concerning,” Carbone said. “Moreover, it’s not reflective of the viewpoints shared with us by other Democratic members of the Committee and Congress as a whole.”

Rep. Waters during an April hearing on stablecoins slammed Republicans for not addressing Democratic concerns in their proposed stablecoin legislation

The draft “in no way recommends the final work on stablecoins by negotiations between the two of us,” Waters said, adding that Democrats will have to “start from scratch.” In the four weeks since the stablecoin hearing, neither Waters nor her Democratic colleagues have released a draft or timeline for a potential bill. 

On Wednesday, though, Waters took an apparently softer approach, noting in her prepared testimony that issues surrounding crypto “should be bipartisan concerns.” 

“These should be bipartisan concerns, and legislation to address them should have a path to the President’s desk,” Waters said. “I hope this Congress, we can quickly return to developing legislation together.”

The leaked documents, released on Twitter, also slam Republican lawmakers for focusing on passing crypto legislation when their top priority, Democrats say, should be on preventing a US debt default.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

tg trading bot report graphic.png

Research

Telegram trading bots have found their primary niche in highly speculative token launches and retail-dominated memecoin markets, with many features specifically tailored to token sniping and copy-trading strategies.

article-image

Ethereum is hoping that increased DA will grow user demand — and its profits through DA fees

article-image

11 years ago, Bitcoin contributors prevented a supply crisis… two centuries from now

article-image

Both samczsun and ZachXBT have issued warnings after the Bybit hack last month

article-image

The investor criticized Michael Saylor’s plan to render his personal bitcoin holdings inaccessible to anyone else forever

article-image

The exchange has structural defenses and protocols to limit manipulations

article-image

Upshift is being spun out of August, which raised $10 million earlier this month