House Democrats are reportedly discussing a new cryptocurrency market structure bill that would expand the Securities and Exchange Commission’s (SEC) oversight of digital assets while reducing the Commodity Futures Trading Commission’s (CFTC) proposed regulatory role.
The discussions, reported on November 4, 2026, by journalist Eleanor Terrett, involve developing legislation for the next Congress following the November 3 midterm elections.
According to three industry sources who spoke with Democratic congressional staff, the proposal could build on Representative Maxine Waters’ Crypto Investor and Consumer Bill of Rights, an amendment introduced during consideration of the CLARITY Act in 2025.
The emerging framework would reportedly incorporate earlier Democratic proposals alongside provisions negotiated with Senate Republicans before September’s unsuccessful procedural vote. No formal legislative text has been released, and lawmakers have not announced an introduction date.
The discussions signal a potential shift in congressional priorities as Democrats prepare to assume greater influence over financial services legislation.
Proposal Revives Investor Protections Rejected in 2025
Waters’ original Crypto Investor and Consumer Bill of Rights proposed additional safeguards for individuals using cryptocurrency exchanges, brokers and custodians. The amendment included requirements for continuous customer support, stronger custody protections and clearer standards governing digital asset transactions.
Under the proposal, covered businesses would have been required to process customer withdrawals within 24 hours, subject to documented fraud-related exceptions. It also called for segregating customer assets in bankruptcy-remote accounts and obtaining explicit consent before using those assets for lending or staking.
Additional provisions included monthly proof-of-reserves reporting accompanied by independent accountant attestations. The framework proposed fiduciary obligations, best-execution requirements and restrictions on front-running. It also included mandatory security breach notifications within 48 hours of discovering incidents involving customer assets or personal information.
The House Rules Committee rejected a motion to permit consideration of Waters’ amendment in July 2025 by an 8–4 vote. The emerging Democratic proposal could revive several of those measures within a broader regulatory framework.
Discussions also reportedly include ethics restrictions addressing cryptocurrency-related financial interests involving President Donald Trump and other federal officials. The precise scope of those provisions remains uncertain.
SEC-CFTC Jurisdiction Dispute Could Reshape Crypto Regulation
A central disagreement concerns how regulatory authority should be divided between the SEC and CFTC. The Republican-backed CLARITY Act proposed granting the CFTC primary oversight of covered spot digital commodity markets while preserving the SEC’s jurisdiction over securities.
Supporters argued that this division would provide clearer operating requirements for cryptocurrency exchanges, brokers and token issuers. The legislation passed the House in July 2025 by a 294–134 vote but failed to advance in the Senate following a September procedural vote of 49–50.
The emerging Democratic framework would reportedly give the SEC broader supervisory authority, potentially changing the regulatory treatment of certain digital asset businesses. Republican lawmakers have characterized the discussions as an effort to establish political priorities rather than immediately enact bipartisan legislation.
However, the proposal’s legislative prospects cannot be assessed fully until formal language becomes available. Any eventual legislation would require approval from both congressional chambers and the president’s signature. For cryptocurrency companies, the debate could influence registration obligations, compliance costs, custody standards and the classification of digital assets.
Expanded SEC oversight could also change the balance between securities regulation and the commodity-focused framework favored by some industry participants. The discussions highlight the continuing disagreement over how the United States should regulate cryptocurrency markets while protecting investors.
Whether lawmakers can reach a compromise remains uncertain, particularly as the existing CLARITY Act faces a limited legislative window before the next Congress begins. For now, the Democratic proposal remains preliminary, with its final provisions and legislative timetable still undetermined.
