- The proposal could revive Waters’ protections, including customer fund segregation, 24-hour withdrawals and monthly proof-of-reserves reports.
- Democrats are considering a larger SEC role and more limited CFTC authority, reversing the House-passed CLARITY Act’s approach.
- The bill remains under discussion for the next Congress in January 2027, with no finalized draft, agreement or legislative timetable.
House Democrats are discussing a broader crypto market structure bill that could expand SEC oversight and revive rejected investor protections. The proposal would build on Maxine Waters’ 2025 Crypto Investor and Consumer Bill of Rights amendment. Journalist Eleanor Terrett reported that discussions involve provisions from earlier House and Senate negotiations.
Democrats Seek to Expand Waters’ Crypto Protections
According to Terrett, three industry sources familiar with discussions involving Democratic staffers described the proposal. Lawmakers have not introduced a new bill. Waters proposed her investor protections during the House debate over the CLARITY Act in 2025.
Her amendment included customer fund segregation, 24-hour withdrawal processing, and monthly proof-of-reserves reports from auditors. It also sought protection against front-running and round-the-clock customer support. However, the House did not adopt those provisions.
The broader proposal could also incorporate measures Senate Democrats negotiated with Republicans before September’s failed cloture vote. The legislation needed 60 votes to advance toward debate.
Proposal Could Shift SEC and CFTC Responsibilities
The discussions include giving the Securities and Exchange Commission a larger role in crypto market supervision. Meanwhile, the Commodity Futures Trading Commission could receive more limited authority.
That approach differs from the House-passed CLARITY Act, which assigned the CFTC primary jurisdiction over digital commodities and intermediaries. Democrats are also considering additional ethics restrictions involving President Donald Trump and other federal officials.
Waters previously proposed the Stop TRUMP in Crypto Act, which sought limits on certain digital-asset transactions involving lawmakers and relatives. Republicans have reportedly dismissed the latest effort as a “messaging bill.” No complete draft or finalized agreement on oversight and ethics provisions has emerged.
Next Congress Faces Renewed Crypto Legislation Debate
The discussions concern legislation for the next Congress, beginning in January 2027. The supplied report also identifies November 3 election victories as part of the political backdrop. Ripple CEO Brad Garlinghouse said pro-crypto candidates won across both parties. He called for clear rules developed in the United States.
Ripple Chief Legal Officer Stuart Alderoty also urged bipartisan cooperation on digital-asset regulation. However, lawmakers have not announced a timetable for the proposed bill. The CLARITY Act also lacks a scheduled Senate vote.
