House Democrats are actively discussing a new crypto market structure bill which could strengthen federal regulators’ oversight and implement stricter ethical standards for government officials involved in digital assets, according to information from journalist Eleanor Terrett, who cited several industry sources familiar with ongoing talks.
Expanded consumer protections on the table
The discussions center on broadening Representative Maxine Waters’ “Crypto Investor and Consumer Bill of Rights,” first proposed as an amendment to the CLARITY Act in 2025. Waters, who currently serves as the Ranking Member of the House Financial Services Committee, originally sought to protect customers on digital asset platforms through explicit consumer safety standards.
The earlier amendment addressed critical concerns such as asset custody, customer withdrawals, and oversight of exchange practices. Under Waters’ proposal, customers would have access to funds within 24 hours, exchanges would provide continuous customer support and offer coverage similar to existing securities investor protections, and routine audits on reserves would become mandatory.
Additional provisions aimed to prevent trading ahead of client orders and to ensure clear procedures for safeguarding customer assets during potential bankruptcies. Waters’ plan also sought targeted funding for both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to support these enhanced responsibilities.
Efforts to pass Waters’ amendment previously stalled in the House, where a procedural vote failed eight to four, leaving consumer protection measures without formal consideration.
Reviving these protections would require lawmakers to introduce a new bill in the next Congress, as unfinished legislation does not carry over between sessions. While sponsors may reuse existing proposals, the bill would need to follow the complete legislative process again.
Debate over SEC and CFTC roles
Discussions around the bill indicate a possible shift in authority between key regulators. House Democrats are reportedly pushing for a larger supervisory role for the SEC, while the CFTC’s remit could be narrowed. The Commodity Futures Trading Commission, commonly referred to as CFTC, currently oversees derivatives and commodities markets, including aspects of crypto trading.
Mini dictionary: CFTC (Commodity Futures Trading Commission), an independent US federal agency regulating derivatives markets, including futures, swaps, and certain digital assets.
Such changes are reigniting debates seen during earlier Senate negotiations. In September, the Senate declined to move forward with the CLARITY Act after a close procedural vote, recording 49 in favor and 50 opposed, falling short of the required threshold. The rejection blocked further consideration of the Act without a final decision on its passage.
| Regulator | Current Scope | Potential Change |
|---|---|---|
| SEC | Securities markets, some digital assets | Expanded supervisory role over crypto |
| CFTC | Derivatives, commodities, some crypto products | Reduced authority in crypto regulation |
Following November’s elections, Democrats gained control of both chambers of Congress, possibly increasing the party’s influence on financial regulation. However, legislative passage will still require agreement between the House and Senate, along with presidential approval. President Donald Trump, who retains the power of veto, could ultimately block new rules targeting officials’ involvement with digital assets.
Ethics rules for federal officials and next steps
Separate ethics proposals are also under review. In May 2025, Waters introduced the “Stop TRUMP in Crypto Act,” alongside fellow committee Democrats. The measure called for restrictions on federal officials, including the president, vice president, members of Congress, and their immediate families, regarding crypto-related business roles, promotional activities, and trading on nonpublic information.
According to Terrett’s reporting, future legislative language may include even stricter limits on federal officials, though no specifics on the scope of these provisions have been released.
Debate continues around how new legislation would identify which digital asset businesses and products must comply with expanded federal requirements, as details are yet to be finalized.
On the regulatory front, the SEC issued updated guidance on crypto asset governance and centralization distinctions in early November. The agency clarified that the new answers represent staff opinions, without setting binding legal standards or creating fresh regulatory obligations.
