Crypto Market Structure Bill: Waters’ SEC Push

House Democrats are working on a wider crypto market structure bill, and the template is Rep. Maxine Waters’ 2025 investor-rights amendment. Word of the effort surfaced in reporting published November 6. On the table: monthly reserve attestations, tougher custody rules and a bigger role for the Securities and Exchange Commission.

The push heads in a different direction from the stalled CLARITY Act. It pairs stronger customer protections with possible limits on crypto business activities by President Donald Trump and other federal officials.

👎Democrats Consider Expanding Waters’ Crypto Investor Rights Proposal
✨SEC Authority and Waters’ Amendment Shape the Crypto Market Structure Bill Debate
📖CLARITY’s House Victory Ran Into a Senate Procedural Defeat
🟣Customer Protections Would Reach Custody, Reserves and Trading
♟️DeFi and Federal Ethics Rules Could Be the Hardest Fights
🟠January 3 Separates the Current CLARITY Effort From a Successor
🎉What to Watch as Democrats Prepare for the Next Congress
❓FAQ

Democrats Consider Expanding Waters’ Crypto Investor Rights Proposal

What Would Form the Basis of the New Bill?

Waters’ Crypto Investor and Consumer Bill of Rights would be stretched into a full framework for the industry. Journalist Eleanor Terrett first described the talks, per CryptoPotato’s November 6 coverage, which drew on her account of conversations among Democratic lawmakers.

The starting point is the amendment Waters offered during the House’s consideration of CLARITY in 2025. Democrats are weighing a combination of provisions that did not survive that process with measures negotiated with Republicans before the Senate’s September procedural defeat.

That puts investor safeguards at the center of the market structure debate. Rather than focusing mainly on how authority is split between regulators, the talks also take up custody, customer-asset coverage and conflicts between trading firms and their customers.

Why Are the Discussions Emerging Now?

The talks follow the November 3 midterm elections. Coverage after the vote described Democrats as winning control of both chambers of Congress, and the incoming Congress convenes in January 2027 — a different setting in which to pursue the party’s regulatory priorities.

For now this is a legislative proposal under discussion, not an introduced bill with an implementation timetable.

SEC Authority and Waters’ Amendment Shape the Crypto Market Structure Bill Debate

How Could the SEC and CFTC Roles Change?

Under the approach, the SEC would take a larger supervisory role and the Commodity Futures Trading Commission a smaller one — a reversal of the previous bill’s CFTC-led approach to crypto spot markets.

For exchanges, the allocation of regulatory authority is a central issue again. Stricter custody obligations and curbs on firms trading against their own customers arrive alongside it, putting supervision and business practices both on the negotiating table.

A successor built heavily on Waters’ proposals would reopen the jurisdictional compromise Republicans sought in CLARITY. It would not simply carry the same framework under a new name.

Who Is Shaping Policy While Congress Debates?

Waters supplies the investor-protection foundation. Crypto law strategist Tonya M. Evans has separately flagged DeFi as a potentially difficult negotiating issue and argued that a bill that starts out symbolic can still shape eventual legislation.

At the agencies, SEC Chairman Paul Atkins and CFTC Chairman Michael Selig remain central to the regulatory path. The Motley Fool’s November 6 analysis notes that Atkins’ term runs to 2031 and that the president keeps choosing agency chairs through January 2029. Either way, agency leadership remains a separate source of policy continuity.

CLARITY’s House Victory Ran Into a Senate Procedural Defeat

How Did CLARITY Advance Before the Senate Stalemate?

Rep. French Hill sponsored the CLARITY Act, which passed the House in July 2025 with support from 216 Republicans and 78 Democrats. Its framework sought to divide digital-asset oversight between the SEC and CFTC.

Senate negotiations ran on over agency jurisdiction, decentralized finance, banking concerns and ethics safeguards. Banking groups warned that crypto products offering rewards could pull deposits away from traditional lenders. Democrats argued the legislation did not do enough about conflicts of interest involving Trump and other senior officials.

What Happened in the September Senate Vote?

Republicans released a revised draft in September and said it incorporated 126 substantive changes requested by Democrats, among them ethics language, measures addressing stablecoin-related deposit concerns and adjustments to blockchain-developer protections.

On September 15, the Senate voted 49–50 on a procedural motion to begin consideration, short of the 60 votes required. Four Republicans joined Democrats in opposing it. That was not a final passage vote, so the next attempt will meet the same disputes over customer safeguards, DeFi and the division of regulatory authority.

Customer Protections Would Reach Custody, Reserves and Trading

What Safeguards Are Democrats Considering for Customer Assets?

The measures under discussion include stricter custody rules and monthly proof-of-reserve attestations meant to check whether a crypto firm holds what it owes customers. They would also add SIPC-like customer-asset coverage, a brokerage-style safety net.

Each idea addresses a different point of exposure: how firms hold assets, how often they attest to reserves, and what protection customers might get if assets are lost. These are proposed safeguards. No customer can claim them under this initiative today.

How Could Exchanges’ Customer Relationships Change?

Democrats are also discussing around-the-clock customer service and limits on firms trading against their own customers. Such measures would reach day-to-day exchange operations, sitting alongside the broader fight over SEC and CFTC authority — customer-facing service obligations on one side, restrictions on how firms participate in their own markets on the other.

DeFi and Federal Ethics Rules Could Be the Hardest Fights

Why Could DeFi Requirements Divide Lawmakers?

Evans sees DeFi as a potentially difficult part of the negotiations. A Democratic operative cited in the coverage suggested the sector could face intermediary-style requirements as a condition of operating.

That would bring a different dispute into the market structure talks: how requirements tied to intermediaries might apply to decentralized services. Protections for blockchain developers were already part of the September revisions. Putting DeFi obligations back into a successor bill would reopen an issue that stayed contentious through the previous negotiations.

How Could Ethics Restrictions Affect Trump and Other Officials?

The proposal could include restrictions on crypto business activities by Trump and other federal officials. Ethics provisions were a sticking point when CLARITY failed to advance in the Senate, which makes them a substantive part of the legislative dispute rather than a separate political issue.

Some Republican lawmakers have dismissed the Democratic initiative as a “messaging bill.” Evans’ counterargument: measures drafted to express a party’s priorities can become the starting text for legislation that eventually passes. The earlier fight over public officials’ business interests shows why ethics language could affect the prospects of an otherwise broader market-regulation package.

January 3 Separates the Current CLARITY Effort From a Successor

What Can Happen Before the Current Congress Ends?

January 3, 2027 is the deadline for passing the current CLARITY bill before this Congress ends. Miss it, and lawmakers would need a new legislative effort in the next Congress.

Two distinct congressional paths follow: action on the existing legislation before the transition, or a successor shaped by incoming Democratic priorities afterward. The Waters-based discussions belong to the second. The deadline is a legislative cutoff, not a start date for monthly reserve checks or other customer protections.

What Could Agency Rulemaking Deliver in the Meantime?

Selig said in April 2026 that he would work to finalize market structure rules within his authority without congressional support if necessary. That leaves agency rulemaking as another policy route while lawmakers debate a broader statutory framework.

Congress could try to overturn new agency rules through a Congressional Review Act resolution. A president can veto such a measure, another institutional obstacle for anyone trying to reverse the agencies’ work.

What to Watch as Democrats Prepare for the Next Congress

Which Provisions Would Signal the Proposal’s Direction?

The central choices: the scale of the SEC’s role, the scope of custody and customer-asset safeguards, and whether DeFi faces intermediary-style requirements. Add ethics restrictions and you have another consequential test of the coalition behind a successor.

Stablecoin rewards could return to the negotiations as well. The November 6 analysis identifies tighter limits on stablecoin yield as a possible difference between the old framework and a Democratic successor, with implications for companies including Coinbase, Circle and Ripple. Rewards and deposit competition were already part of the Senate negotiations that failed to advance CLARITY.

What Other Congressional Oversight Could Accompany the Bill?

The same analysis anticipates hearings and investigations into presidential crypto ventures, including World Liberty Financial, along with efforts to strengthen ethics rules. Those are expectations about the incoming Congress — not scheduled proceedings or findings of misconduct.

For the industry, the immediate issue is the substance of the next negotiating framework: more SEC authority, stronger customer obligations and a renewed ethics debate. Passage still depends on resolving the divisions that blocked the previous attempt.

FAQ

When Does the Current Congress End for Purposes of Passing the CLARITY Act?

The relevant cutoff is January 3, 2027. A CLARITY bill that has not become law by then would need a new legislative effort in the next Congress.

How Many House Democrats Supported CLARITY in July 2025?

Seventy-eight House Democrats voted for it, alongside 216 Republicans. That bipartisan support helped the bill clear the House but did not settle the Senate negotiations that followed.

What Was the September 15 Senate Procedural Vote, and How Many Votes Were Required?

The motion received a 49–50 result against a 60-vote threshold for advancing consideration. Four Republicans opposed it with Democrats, preventing the Senate from taking up the bill through that motion.

How Often Would Crypto Firms Provide Reserve Attestations Under the Proposal?

The contemplated frequency is monthly, with attestations intended to compare firms’ holdings with what they owe customers. The proposal also discusses SIPC-like customer-asset protection as a separate safeguard.

Which Federal Officials Could Face the Proposed Crypto Ethics Restrictions?

The discussions identify President Donald Trump and other federal officials as potential subjects of restrictions on crypto-related business activities. Conflicts involving senior officials were already a disputed issue in the CLARITY negotiations.

What Did CFTC Chairman Michael Selig Say About Rulemaking Without Congressional Action?

In April 2026, Selig said he would pursue market structure rules within the CFTC’s authority without congressional support if needed. His statement concerned agency action, a separate route from passing a new market structure statute.

How Does the Market Structure Proposal Differ From the GENIUS Act?

GENIUS is a federal payment-stablecoin framework introduced by Sen. Bill Hagerty and signed into law on July 18. The Democratic discussions concern a broader market structure approach covering agency authority, customer protections and possible ethics restrictions.

This article is for information only and is not financial advice.