House Democrats plan a crypto market structure bill with more power for the SEC

House Democrats are discussing their own crypto market structure bill for the Congress that starts on 3 January, journalist Eleanor Terrett reported on 4 November, citing three industry sources. The draft would give the SEC a bigger role in crypto markets, shrink the CFTC’s share and add new limits on crypto business by President Trump and other federal officials. No bill text exists yet, Bitcoin Magazine noted.

What the draft would combine

Democrats want to build on two pieces:

• Maxine Waters’ Crypto Investor and Consumer Bill of Rights, which she offered as an amendment to the CLARITY Act in July 2025;
• terms that Senate Democrats and Republicans agreed on before the 15 September vote, when CLARITY fell 49 to 50.

The House Rules Committee blocked the Waters amendment 4 to 8 along party lines. It would have required 24/7 customer service, insurance similar to SIPC cover, best-execution and anti-front-running rules, and custody kept apart from an exchange’s own assets, with withdrawals within 24 hours and monthly proof of reserves checked by an auditor.

A separate amendment from Joe Neguse, also rejected 4 to 8, would have barred members of Congress, presidents and vice presidents from issuing or promoting digital assets.

SEC instead of CFTC

The CLARITY text that passed the House 294 to 134 gave the CFTC most digital commodity trading and let tokens on mature blockchains skip SEC registration under some conditions. The Democratic plan moves that balance toward the SEC. Waters is in line to chair the House Financial Services Committee in January, taking over from French Hill, who sponsored CLARITY.

Republicans call the effort a “messaging bill”, Terrett reported. Senator Ruben Gallego, a Democrat on the Banking Committee, told Bloomberg Law: “The industry and the Republicans screwed up. That was the best bill they were going to get.” Jaret Seiberg of TD Cowen wrote that the Democratic sweep closes the door on CLARITY for two years, as crypto.news also reported.

Trump’s signature

Any bill still needs Trump’s signature, and the draft targets his family’s crypto ventures. Seiberg wrote that Democratic investigations of those ventures “may make it impossible” to pass a version the industry can support. Republicans keep the outgoing Congress until 3 January and could still try to revive CLARITY in the lame-duck session, which we covered after the Senate vote.

What it means for you

If you trade on a US platform, the Waters rules would change daily service: withdrawals within a day, segregated custody and audited reserves. A stronger SEC could also treat more tokens as securities. Until lawmakers publish a text, your platform’s terms stay as they are. We looked at how Democrats voted on earlier crypto bills.

This piece is based on Eleanor Terrett’s reporting as summarised by Bitcoin Magazine. Lawmakers have not published the bill or confirmed its terms.