Democrats May Rewrite CLARITY Act and Dare Trump to Veto It, Giancarlo Says

Former Commodity Futures Trading Commission Chairman Chris Giancarlo says Democrats could introduce their own version of the CLARITY Act once they control Congress in January and challenge President Donald Trump to sign it. In a November 11 interview with Bitcoin Magazine, he described the likely posture in blunt terms: "We dare you to veto it."

The strategy, as Giancarlo outlined it, would let Democrats present themselves as supporters of crypto market structure regulation while forcing the president to either approve opposition-drafted legislation or own a veto. The maneuver depends on heavyweight Democratic senators — he named Elizabeth Warren and Sherrod Brown — whose positions on cryptocurrency regulation have repeatedly diverged from Republican priorities.

What survives in a Democratic rewrite?

Giancarlo said he has heard that Representative Maxine Waters intends to retain roughly 80% of the existing CLARITY Act, with the remaining 20% carrying Democratic priorities. Put differently: the core jurisdictional architecture would largely stand, but a fifth of the text would change hands.

House Democrats have discussed legislation that would hand the Securities and Exchange Commission more authority over cryptocurrencies while scaling back the Commodity Futures Trading Commission's remit. The proposal reportedly draws on Waters' earlier Crypto Investor and Consumer Bill of Rights amendment, which included custody protections, withdrawal safeguards and reserve reporting requirements. Democrats have also discussed provisions targeting the cryptocurrency interests of elected officials, including Trump and members of his administration.

Giancarlo expects the Democratic offensive to aim at the president and his family's crypto ventures rather than at the industry itself. He argued that a renewed campaign against the sector would be politically difficult, given that crypto companies kept operating through the regulatory disputes of the Biden administration.

Why the last attempt stalled

The existing CLARITY Act died on the Senate floor in September, when a procedural motion failed 49 to 50 against a 60-vote threshold. Seven Democratic senators later signaled interest in resuming negotiations, but disagreements over ethics provisions and consumer protections went unresolved.

Giancarlo warned that a Democratic proposal could drift far from the current bill as lawmakers attach unrelated priorities. He raised the possibility of restrictions, prohibitions and credit card fee proposals entering the negotiations, comparing the dynamic to the horse-trading around the Dodd-Frank reform law. In that scenario, he said, Trump could reject the legislation on the grounds that its provisions were no longer primarily about crypto.

The November midterms handed Democrats control of both chambers beginning January 3. Waters is expected to lead the House Financial Services Committee, and Warren could chair Senate Banking — placing two of the bill's most consequential actors directly atop the jurisdiction.

The SEC–CFTC turf question

Giancarlo said the SEC and CFTC have already built a cooperative approach to digital asset oversight without waiting for Congress to legislate their division of labor. He called the renewed debate over supervisory authority "less about good regulation and more about turf," arguing jurisdictional fights are often driven by political power and the industries before congressional committees.

He drew the functional distinction sharply: the SEC specializes in disclosure designed to correct information asymmetries between companies and investors, while the CFTC focuses on market integrity, price formation and manipulation prevention. Congress, he said, should map those differences onto crypto products, ensure there is "no overlap" between regulators, and confirm each agency holds the relevant expertise.

He praised coordination between SEC Chairman Paul Atkins and CFTC Chairman Michael Selig as "quite a remarkable accomplishment," while conceding Congress could still redraw their responsibilities. He also criticized the failure to fill vacant commissioner seats, blaming both the White House and Senate leadership. "I'm a big believer in a full commission structure," he said, noting his own rules benefited from bipartisan commissioner debate — and that the agencies must keep rulemaking regardless of how many commissioners serve.

For market participants, the operative question is sequencing: a Waters-led committee with a Warren-led Banking panel could move a rewritten CLARITY Act early in the session, leaving the White House to decide on a bill that is four-fifths familiar and one-fifth new.