Following midterm wins, US Democrats outline plans for new Crypto Market Structure bill

• Crypto investor protections could return to the legislative agenda as US Democrats reportedly weigh reviving Rep. Maxine Waters’ Crypto Investor and Consumer Bill of Rights within a wider market structure proposal.
• Wider SEC supervision of crypto markets and tighter ethics curbs on Trump and other federal officials could form part of the proposed legislation.
• Democrats’ dominant performance in the US midterm elections provides the backdrop to the development.

Crypto market regulation could face a broader legislative push in the next Congress, with House Democrats reportedly considering a new market structure bill. The discussions could bring back provisions the party tried unsuccessfully to add to the Digital Asset Market Clarity Act (CLARITY).

Could Democrats Revive Rejected Crypto Regulatory Measures?

An expanded version of the Crypto Investor and Consumer Bill of Rights would underpin the proposal, crypto journalist Eleanor Terrett reported in an X post on Wednesday. Rep. Maxine Waters had introduced the amendment while the House was considering the CLARITY Act.

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

A larger supervisory role for the Securities and Exchange Commission (SEC), alongside narrower authority for the Commodity Futures Trading Commission (CFTC), is among the options being discussed for crypto markets. Ethics curbs are also expected to feature in Democrats’ plans, potentially restricting President Donald Trump and other federal officials from undertaking crypto-related business activities.

The proposal has reportedly been labelled a “messaging bill” by Republicans, suggesting its purpose may be to outline Democratic priorities rather than win bipartisan backing immediately.

Control of both the House and Senate went to Democrats following their dominant showing in the November 3 US midterm elections. The discussions come as the party prepares to assume control when the new Congress meets in January 2027, changing the political backdrop for crypto regulation.

Crypto policy had previously been driven in large part by Republicans. Their initiatives included the GENIUS Act, the landmark federal framework for payment stablecoins introduced by Republican Senator Bill Hagerty, which was signed into law on July 18.

What Does Renewed Political Uncertainty Mean for the CLARITY Act?

Another Republican-led initiative was the CLARITY Act, sponsored by Rep. French Hill. Aimed at setting out the regulation of digital assets and allocating oversight between the SEC and CFTC, it cleared the House in July 2025 with support from all 216 Republicans and 78 Democrats.

House approval was followed by months of negotiations in the Senate, where regulatory powers, decentralised finance (DeFi), banking issues and ethics safeguards remained under discussion.

For Democrats, the bill fell short in addressing conflicts of interest linked to Trump and other senior officials. Banking groups separately cautioned that reward-bearing crypto products could divert deposits from traditional lenders.

A revised draft published by Republicans in September contained what they said were 126 substantive changes sought by Democrats. These covered fresh ethics provisions, steps to address deposit risks associated with stablecoins and changes to protections for blockchain developers.

The Senate nevertheless voted 49-50 on September 15 to reject a procedural motion that would have opened consideration of the bill, leaving it short of the 60 votes needed to proceed. Four Republicans sided with Democrats against the motion, preventing the legislation from advancing in the current Congress.

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