House Democrats are discussing whether to introduce their own crypto market structure bill in the next Congress after the party’s sweep of Congress, according to a Wednesday report by Eleanor Terrett cited by Bitcoin Magazine. The plan under discussion would turn Rep. Maxine Waters’ Crypto Investor and Consumer Bill of Rights into a broader market structure proposal, with a larger role for the U.S. Securities and Exchange Commission and a smaller one for the Commodity Futures Trading Commission.
Terrett cited three industry sources who said they had spoken with Democratic staffers. The proposal would reportedly combine the Democratic Clarity Act provisions Waters offered in the House but failed to get adopted, along with provisions Senate Democrats had been able to agree on with Republicans before September’s failed cloture vote.
Terrett also wrote that additional ethics provisions are likely, including restrictions on the crypto activities of President Donald Trump and other federal officials. Republicans have described the effort as a “messaging bill.”
No text of the proposed crypto market structure bill has been released. For now, the available details come from industry sources rather than lawmakers.
Talks gained momentum after Democrats took control
The discussions come after Democrats swept Congress on Tuesday. Waters, the top Democrat on the House Financial Services Committee, is in line to take the gavel in January from Chairman French Hill, the sponsor of the Clarity Act.
Bloomberg Law reported Wednesday that the new majorities give Democrats leverage over the Clarity Act, which has been the crypto industry’s top legislative priority. That leverage could begin with tougher ethics rules aimed at Trump’s ventures.
What Waters’ amendment would have required
Waters offered the bill of rights as amendment #31 to H.R. 3633 in July 2025. The House Rules Committee blocked it 4-8 along party lines on a motion from Rep. Mary Gay Scanlon of Pennsylvania.
When an amendment is made in order, the full House can debate and vote on it. That did not happen here, which kept the package off the floor.
According to the committee record, the amendment would have required:
- 24/7 customer service;
- insurance or SIPC-like coverage;
- fiduciary and best-execution rules;
- anti-front-running rules;
- bankruptcy-remote custody with 24-hour withdrawals; and
- monthly proof-of-reserves reports attested by auditors.
It also would have sent more funding to both the SEC and the CFTC.
The committee rejected a second Democratic amendment by the same 4-8 margin. That proposal, from Rep. Joe Neguse of Colorado, would have barred members of Congress, presidents, and vice presidents from issuing or endorsing digital assets. The ethics dispute previewed there later followed the bill into the Senate.
Where Democrats would diverge from the Republican framework
The split between the SEC and the CFTC is the clearest place where a Democratic market structure bill would depart from the Republican version.
The House-passed Clarity Act directs the CFTC to regulate most digital commodity trading, including exchanges, brokers, and dealers. It also exempts tokens on mature blockchains from SEC registration under certain conditions. That framework is the one the industry backed.
A Democratic bill that shifts supervision back toward the SEC would reverse that approach.
Status of the Clarity Act
The Clarity Act passed the House 294-134 in July 2025. It then failed a Senate cloture vote 49-50 on Sept. 15.
Sen. Thom Tillis entered a motion to reconsider, preserving the option of another vote. Even so, the bill expires when this Congress ends on Jan. 3 unless the lame-duck session revives it.
Democrats now hold the leverage.
Bloomberg Law reported comments from Sen. Ruben Gallego of Arizona, a member of the Senate Banking Committee, who said: “The industry and the Republicans screwed up. That was the best bill they were going to get.”
TD Cowen’s Jaret Seiberg wrote Wednesday that the Democratic sweep shuts the door on Clarity for two years, and that Democratic investigations into the Trump family’s crypto ventures “may make it impossible to advance a version of Clarity that the crypto sector could back.”
The question facing the next Congress
Even if Democrats move ahead with their own crypto market structure bill, it would still need Trump’s signature to become law.
Whether a bill built around a stronger SEC role can win enough Republican votes, or whether it remains what Republicans call a “messaging bill,” is the question hanging over the opening of the next Congress.
This article first appeared on Bitcoin Magazine and was written by Micah Zimmerman.
