Midterm wins: US Democrats plan fresh Crypto Market Structure bill

• Rep. Maxine Waters’ Crypto Investor and Consumer Bill of Rights could reportedly be revived as US Democrats consider a wider market structure proposal.
• Under the proposed legislation, the SEC could gain broader oversight of crypto markets, alongside tighter ethics restrictions aimed at Trump and other federal officials.
• Democrats’ dominant performance in the US midterm elections precedes the development.

A wider crypto market structure bill is reportedly under discussion among House Democrats for the next Congress. It could restore provisions the party unsuccessfully tried to add to the Digital Asset Market Clarity Act (CLARITY).

Democrats Weigh Revival of Rejected Crypto Rules

According to an X post published on Wednesday by crypto journalist Eleanor Terrett, the proposal would build on the Crypto Investor and Consumer Bill of Rights. Rep. Maxine Waters introduced that amendment when the House considered the CLARITY Act.

Citing three unnamed industry sources who had spoken with Democratic staffers, Terrett said the proposal could bring together Democratic provisions rejected by the House and measures Senate Democrats negotiated with Republicans before the Clarity Act stalled in September.

A larger supervisory role for the Securities and Exchange Commission (SEC), coupled with reduced authority for the Commodity Futures Trading Commission (CFTC), is among the options being discussed for crypto markets. Ethics restrictions are also expected to feature in Democrats’ plans. These could constrain President Donald Trump and other federal officials’ participation in crypto-related businesses.

The proposal has reportedly been labelled a “messaging bill” by Republicans. That description suggests its purpose may be to outline Democratic priorities rather than win immediate bipartisan backing.

On 3 November, Democrats won control of both the House and Senate in a dominant US midterm election performance. The discussions follow that result. When the new Congress convenes in January 2027, the party will assume control, reshaping the political backdrop for crypto regulation.

Crypto policy initiatives have been driven in large part by Republicans. These include the GENIUS Act, the landmark federal framework for payment stablecoins that Republican Senator Bill Hagerty introduced and that became law on 18 July.

CLARITY Act Returns to Political Uncertainty

With all 216 Republicans and 78 Democrats voting in favour, the CLARITY Act cleared the House in July 2025. Sponsored by Rep. French Hill, it was another Republican-led initiative. The legislation aimed to establish rules for digital assets and allocate supervisory responsibilities between the SEC and CFTC.

House approval was followed by months of Senate talks covering regulatory jurisdiction, decentralised finance (DeFi), banking concerns and ethics safeguards.

In Democrats’ view, the bill offered insufficient safeguards against conflicts of interest involving Trump and other senior officials. Separately, banking groups cautioned that reward-bearing crypto products could divert deposits from traditional lenders.

A revised draft issued by Republicans in September contained what they said were 126 substantive changes requested by Democrats. Those amendments added ethics provisions, addressed deposit risks linked to stablecoins and modified protections for blockchain developers.

On 15 September, however, a 49-50 Senate vote blocked a procedural motion that would have opened consideration of the bill. The motion fell short of the 60 votes needed to proceed, with four Republicans voting alongside Democrats against it. The outcome halted the legislation’s progress in the current Congress.

A different approach to crypto market rules could emerge as Democrats prepare to assume control of both chambers in January 2027. The party could give greater weight to investor protections and SEC supervision, alongside limits on public officials’ crypto-related business interests.