The White House sets the bottom line for cryptocurrency asset regulation legislation: banning provisions targeting individuals

A major legislative negotiation regarding the future of the digital asset market is underway, and the White House has just clarified the red lines for the negotiators. According to Patrick Witte, a senior government advisor involved in the talks, this legislation, called the “Market Structure Act,” will become the most influential digital asset-related bill to date, but its content must adhere to two “red lines” set by the government.

White House’s Clear Position: Innovation First, Targeted Bans

Witte is the Executive Director of the President’s Digital Asset Advisory Committee. He told CoinDesk, “We have clearly defined our boundaries. We will not allow personal attacks on the President or his family members.” This statement marks the government’s stance on building a regulatory framework for digital assets—supporting innovation and development, but refusing to mix political motives into regulatory measures.

Witte further explained that the government’s stance on digital assets should not be narrowly understood as “support for cryptocurrencies,” but should be viewed within a broader technological innovation strategy. He said the government is working to create an environment conducive to the development of cutting-edge technologies like artificial intelligence, digital infrastructure, and fintech. “This is a government focused on innovation,” he emphasized. “We want these technologies to be developed and deployed in the U.S., which requires a sound legislative framework that provides regulatory certainty rather than excessive administrative burdens.”

Why the Market Structure Bill Is Urgent

The reshaping of the global financial architecture is happening in real time. This involves not only U.S. policy choices but also whether the U.S. can maintain its leadership in the global tech race. Witte pointed out that if the U.S. misses this window, these innovations will take root elsewhere. “If we don’t seize the opportunity now,” he said, “all of this will eventually be built, just not in America.”

This argument touches on the core value of the market structure legislation—it’s not just a set of rules but a strategic choice about the country’s technological competitiveness.

The Ethical Line: The Tug-of-War Between Bans and Rationality

One of the most controversial clauses in the negotiations involves ethical standards for government officials and their family members holding digital assets. Early proposals from the Democratic side suggested very strict restrictions—effectively banning spouses and family members of government officials from engaging in the crypto industry, including any management roles or legitimate business activities.

Witte criticized this harsh stance: “This initial proposal is simply unacceptable. You can’t solve ethical issues by completely banning entire families from participating in an industry.” The White House’s position is that moderate restrictions are acceptable, but any comprehensive bans on individuals or family members are not.

The Coexistence of OTC Markets and Regulated Channels

What is OTC (over-the-counter) trading in the digital asset market? In short, it refers to large-volume crypto transactions conducted outside formal exchanges. The existence of OTC markets reflects the current market’s imperfections—large institutional investors and corporate clients cannot complete sizable trades through regulated platforms and must rely on OTC deals. An effective market structure bill should provide clear regulation for such transactions, rather than attempt to ban them outright.

The ongoing negotiations are essentially seeking a balance: preventing the crypto market from becoming completely unregulated, while avoiding heavy-handed administrative measures that stifle this emerging industry’s growth.

Democratic Party’s Shift: From Punishment to Pragmatism

Despite disagreements, there are encouraging signs. Witte observed that some Democratic representatives are adopting a more pragmatic approach, focusing on establishing a workable regulatory system rather than solely seeking punitive measures. This shift in mindset is crucial.

He said the real goal should be to make digital assets a regulated, legitimate part of the financial system, rather than using targeted rules for political ends. “If we only craft narrow rules,” Witte explained, “they won’t solve the fundamental issues of the market. What the market truly needs are a clear regulatory framework and transparent rules.”

This pragmatic attitude opens the door to eventual policy compromises. A piece of legislation that protects investors’ interests while providing certainty for the digital asset industry no longer seems like an unreachable goal.