House Democrats are crafting a crypto market structure bill that would give the SEC more oversight, leveraging their election sweep.
On Wednesday, Eleanor Terrett reported that House Democrats are exploring a proposal to transform Rep. Maxine Waters' Crypto Investor and Consumer Bill of Rights into a comprehensive crypto market structure bill for the next Congress. The plan reportedly envisions an expanded role for the SEC and a reduced one for the CFTC.
According to Terrett, who cited three industry sources familiar with discussions with Democratic staffers, the draft would incorporate the Democratic Clarity Act provisions that Waters had introduced in the House but were never enacted. It would also include the sections that Senate Democrats and Republicans had reached consensus on prior to the unsuccessful cloture vote in September.
Additional ethics rules curbing the cryptocurrency involvement of President Donald Trump and other government officials are also expected, Terrett added. The proposal has been labeled a "messaging bill" by Republicans.
So far, no official text of the crypto market structure bill has been made public, and the available details originate from industry sources, not from legislators.
JUST IN: House Democrats reportedly want to revive their Clarity Act provisions in a broader crypto market structure bill next Congress, Eleanor Terrett reports. pic.twitter.com/8twokppjHz
— Bitcoin Magazine (@BitcoinMagazine) November 4, 2026
The discussions come after the Democratic Party's sweep of Congress on Tuesday. Waters, who serves as the leading Democrat on the House Financial Services Committee, is expected to assume the chairmanship in January, taking over from French Hill, who sponsored the Clarity Act.
According to a Wednesday report by Bloomberg Law, the fresh Democratic majorities provide the party with bargaining power over the Clarity Act, which is the cryptocurrency sector's foremost legislative goal. This leverage begins with stricter ethics provisions targeting Trump's business interests.
In July 2025, Waters introduced her crypto investor and consumer bill of rights as amendment number 31 to H.R. 3633. The House Rules Committee rejected it by a vote of 4-8, following a motion from Representative Mary Gay Scanlon of Pennsylvania. Designating an amendment as "in order" would have allowed floor debate and a vote, so the rejection prevented the package from being considered by the full chamber.
According to the committee's documentation, the amendment would have mandated round-the-clock customer support, insurance or coverage similar to SIPC, fiduciary duties and best execution standards, measures to prevent front-running, bankruptcy-remote custody with withdrawals within 24 hours, and monthly auditor-verified proof of reserves. Additionally, it would have allocated increased funding to both the SEC and the CFTC.
A subsequent Democratic amendment, also defeated by a 4-8 vote, was put forward by Representative Joe Neguse of Colorado. It would have prohibited members of Congress, presidents, and vice presidents from issuing or promoting digital assets. The ethical conflict this foreshadowed accompanied the bill when it moved to the Senate.
The key difference between a Democratic crypto market structure bill and its Republican counterpart would lie in the allocation of authority between agencies. The Clarity Act, as passed by the House, tasks the CFTC with overseeing the majority of digital commodity trading—covering exchanges, brokers, and dealers—and provides exemptions from SEC registration for tokens on established blockchains under specific circumstances.
That framework received industry support. A crypto market structure bill that shifts regulatory oversight back to the SEC would undo this arrangement.
The Clarity Act cleared the House in July 2025 with a 294-134 vote, but fell short in a Senate cloture vote on September 15, failing 49-50. Senator Thom Tillis filed a motion to reconsider, keeping the possibility of another vote alive; however, the legislation will expire at the close of the current Congress on January 3 unless it is revived during the lame-duck session.
Democrats currently possess the advantage. Senator Ruben Gallego of Arizona, a member of the Senate Banking Committee, remarked in comments covered by Bloomberg Law: “The industry and the Republicans screwed up. That was the best bill they were going to get.”
On Wednesday, TD Cowen analyst Jaret Seiberg wrote that the Democratic sweep shuts the door on the Clarity Act for a two-year period. He added that Democratic probes into the Trump family's cryptocurrency projects “may make it impossible to advance a version of Clarity that the crypto sector could back.”
Even if Democrats craft their own crypto market structure bill, it would still require President Trump's approval to become law. The key question for the next Congress is whether a bill centered on the SEC can attract sufficient Republican support to reach that point, or whether it will stay a "messaging bill" as Republicans describe it.
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Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
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