House Democrats Eye SEC-Heavier Crypto Market Structure Bill

By Marcus Bennett

House Democrats are discussing a crypto market structure bill for next Congress, according to Eleanor Terrett, with Rep. Maxine Waters' consumer protections and a larger SEC role at its center.

Terrett cited three industry sources who spoke with Democratic staffers. No text for the proposal has been released, and lawmakers have not yet confirmed its details.

Bloomberg Law described the Clarity Act as the industry's top legislative priority. The bill passed the House 294-134 in July 2025 and failed a Senate cloture vote 49-50 on Sept. 15.

Sen. Ruben Gallego of Arizona, a Senate Banking Committee member, said in comments reported by Bloomberg Law: “The industry and the Republicans screwed up. That was the best bill they were going to get.”

What does the reported bill include?

Terrett said Democrats want to turn Rep. Maxine Waters' Crypto Investor and Consumer Bill of Rights into their own market structure proposal. The plan would combine provisions she offered in the House with provisions Senate Democrats agreed on with Republicans before September's failed cloture vote.

Waters offered the bill of rights as Amendment No. 31 to H.R. 3633 in July 2025. The House Rules Committee blocked it 4-8 along party lines, following a motion from Rep. Mary Gay Scanlon of Pennsylvania. Because the committee did not declare the amendment “in order,” the House could not debate or vote on the package.

The committee's record lists what the proposal would have required:

• 24/7 customer service.
• Insurance or SIPC-like coverage.
• Fiduciary and best-execution rules.
• Anti-front-running rules.
• Bankruptcy-remote custody, 24-hour withdrawals and monthly, auditor-attested proof of reserves.
• More funding for the SEC and CFTC.

The same 4-8 vote rejected a second Democratic amendment from Rep. Joe Neguse of Colorado. It would have barred members of Congress, presidents and vice presidents from issuing or endorsing digital assets. That dispute previewed the ethics fight that followed the bill in the Senate.

Further ethics provisions restricting the crypto activities of President Donald Trump and other federal officials are also likely, Terrett wrote.

What does an SEC-centered bill change for crypto firms?

The reported design would give the SEC a larger role and the CFTC a smaller one. That would break most sharply from the industry-backed Clarity Act that the House passed.

The House-passed bill 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. For firms, the practical change is which agency sets the registration and trading rules.

Democrats now hold leverage after Tuesday's Democratic sweep of Congress. Waters, the top Democrat on the House Financial Services Committee, is in line to take the gavel in January from Chairman French Hill, the Clarity Act's sponsor. Bloomberg Law reported Wednesday that the new majorities give Democrats leverage over the industry's top legislative priority, including tougher ethics rules aimed at Trump's ventures.

TD Cowen's Jaret Seiberg wrote Wednesday that the sweep closes the door on Clarity for two years. He also said Democratic investigations of the Trump family's crypto ventures “may make it impossible to advance a version of Clarity that the crypto sector could back.”

Republicans are calling the effort a messaging bill.

What happens next?

The Clarity Act's Senate path remains technically open. Sen. Thom Tillis entered a motion to reconsider, preserving the option of another vote. But the bill dies when the current Congress ends Jan. 3 unless the lame-duck session revives it.

Any Democratic crypto market structure bill would still need Trump's signature. The practical test is whether an SEC-centered framework can draw enough Republican votes before the next Congress opens. Otherwise, the reported package could remain a messaging bill.

The immediate deadline is Jan. 3, when the current Congress ends, or an earlier floor vote if lawmakers revive the Clarity Act during the lame-duck session.