Democrats weigh crypto market structure bill with larger SEC role

What happened

House Democrats have begun weighing a crypto market structure bill for the next Congress, according to a report from journalist Eleanor Terrett that cited three industry sources briefed by Democratic staffers. The plan would build on Representative Maxine Waters' Crypto Investor and Consumer Bill of Rights, an amendment she offered to the 2025 CLARITY Act, and expand it into a full market structure framework.

Ideas under discussion include a broader supervisory role for the Securities and Exchange Commission and a narrower remit for the Commodity Futures Trading Commission, Crypto.news and Blockonomi reported. The proposal would also revive ethics provisions aimed at the crypto dealings of President Donald Trump and other federal officials, drawing on Democratic amendments filed during the House's work on CLARITY and on language negotiated between Senate Democrats and Republicans before a failed procedural vote in September.

No draft text or introduction date has been confirmed. Republicans have described the effort as a "messaging bill," according to Terrett's reporting. Because unfinished legislation expires at the end of a Congress, any bill would need to be reintroduced and moved through the full legislative process even where negotiators have already agreed on provisions.

Why it matters

Democrats won control of both chambers in the November 3 elections, Reuters reported, giving them sway over hearings, committee agendas and floor scheduling when the next Congress convenes. That changes the terrain for crypto legislation: new chairs may put consumer protections, ethics limits and oversight of crypto firms ahead of market structure talks, which could slow negotiations or force parts of the bill to be rewritten.

Crypto companies would keep facing open questions on registration, token classification and exchange requirements. Democratic control does not guarantee a reversal, though, since some lawmakers favor clearer rules while disputing Republican approaches to enforcement and safeguards. Even a passed bill would face a president who retains veto power, a particular obstacle for provisions aimed at officials' financial interests.

What the data shows

Waters' nine-page amendment, filed as amendment 31, set specific consumer conditions: cash withdrawals or digital asset transfers honored within 24 hours unless a documented, good-faith fraud concern applied; continuous human phone or live-chat support with waits capped at five minutes; customer assets held in bankruptcy-remote segregated accounts; affirmative, revocable consent before lending, staking or reusing those assets; and cryptographically verifiable reserve disclosures at least monthly with an attestation from a licensed public accountant. It also required notice within 48 hours of a breach affecting customer assets or personal data, and it proposed funding for both agencies. A motion to make the amendment eligible for consideration failed 4-8 in the House Rules Committee.

A companion measure, numbered 30, carried the Stop TRUMP in Crypto Act introduced in May 2025, aimed at crypto conflicts involving the president, vice president, members of Congress and their immediate families.

Markets moved alongside the political news. Bitcoin slipped below $76,000 and traded near $75,000 overnight before recovering above $77,000 on Wednesday morning, 99Bitcoins reported, as technology shares sold off. The Nasdaq 100 entered correction territory on November 2, more than 10% below its October record, amid investor doubts about returns on AI spending.

Background

The CLARITY Act passed the House 294-134 in July 2025 with bipartisan support but stalled in the Senate, where a September cloture motion failed 49-50, short of the 60 votes needed to open consideration. Senator Thom Tillis changed his vote to no for procedural reasons, keeping the door open to reconsideration; the roll call was not a final rejection of the bill.

The Republican framework would hand the CFTC authority over covered spot digital commodity markets while leaving the SEC jurisdiction over securities and investment contracts, and it set registration paths for digital commodity exchanges, brokers and dealers. Sponsors said the revised text absorbed 126 substantive changes requested by Democratic negotiators. Ethics talks included requiring covered officials to divest certain crypto interests or place them in a blind trust, covering federally elected officials, federal judges and their spouses.

What to watch

Several questions remain open. It is unclear whether the Democratic proposal will be introduced as a formal bill, how closely it will track the Waters amendment, and how far its ethics provisions would reach, since Terrett's report did not specify their scope. Also unresolved is whether language negotiated with Senate Republicans survives the redrafting. Separately, SEC staff issued revised crypto guidance on November 2 covering network governance and signs of central control, distinguishing a functioning blockchain from one meeting decentralization criteria; the agency said the views are staff-level, carry no legal force and were neither approved nor disapproved by the Commission.

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