Fresh off their midterm heroics, House Democrats are reportedly discussing a broader crypto market structure bill that would expand Rep. Maxine Waters’ consumer bill of rights.
According to those in the know, the proposal could give the SEC more oversight and also add stricter rules for crypto exchanges.
Democrats to Revisit Provisions Left Out of the CLARITY Act
The proposal was first reported by journalist Eleanor Terrett, who noted that Dem lawmakers were having discussions about expanding a 2025 amendment to the CLARITY Act called the Crypto Investor and Consumer Bill of Rights, fronted by Waters, into a wider “market structure” bill for the industry.
According to her, the proposal is looking to combine provisions the congresswoman had offered but had not been adopted as well as those of other Democrats that Republicans had agreed to before the failed cloture vote in September.
Citing at least four sources she says are familiar with the matter, Terrett reported that on oversight, the SEC would get a larger role and the CFTC a smaller one, therefore reversing the CFTC-led approach to spot markets in the last bill. There is also a likelihood that ethics provisions that would restrict the crypto activities of President Donald Trump and other federal officials could be included. This had been a sticking point when CLARITY failed to move in the Senate.
Furthermore, the bill would put consumer protection back in the mix, starting with much stricter custody rules and monthly proof-of-reserve attestations, to confirm whether a crypto firm is holding what it owes its customers. Also to be included will be SIPC-like coverage of customer assets, a brokerage-style safety net, as well as 24/7 customer service and limits on firms trading against their own customers.
But the hardest fight, according to crypto law strategist Tonya M. Evans, could be around DeFi, with a Democratic operative reportedly suggesting that the industry may be made to meet intermediary-style requirements in order to operate.
Midterm Results Complicate the Path to a Crypto Framework
While some GOP legislators have apparently dismissed the measure as a “messaging bill,” Evans pointed out that such bills often end up as the starting draft to what eventually becomes law.
Analysts like Ash Crypto had warned that the CLARITY Act could be delayed for at least two years after the midterms produced a “blue tsunami” that saw Dems flip 7 Senate seats to reach 54 to the Republicans’ 44, as well as a projected 258 House seats (flipping 42) when it’s all done and dusted.
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