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Patrick McHenry spent years trying to build a rulebook for crypto. Now he is warning that the next person holding the pen may write a very different one.
The former chairman of the House Financial Services Committee says Rep. Maxine Waters’s leadership leaves little hope for reasonable crypto market structure legislation. Waters is set to take over that committee in January 2027, after Democrats won control of both chambers in the November 3, 2026 midterm elections.
McHenry reads the tea leaves
In a recent interview, McHenry zeroed in on Waters’s stated approach to regulation. She has described her goal as “tough but fair” rules.
McHenry is not buying the second half of that phrase. He framed the language as a signal that the coming legislation could be harmful, particularly for crypto firms.
Waters has a track record that gives her critics something concrete to point at. In 2025, she put forward the Crypto Investor and Consumer Bill of Rights, a proposal centered on stronger consumer protections.
An amendment she offered that same year included two notable requirements. Firms would need to provide monthly proof of reserves, and customers would be entitled to 24-hour withdrawals.
A mea culpa on the CLARITY Act
McHenry did not spend the whole conversation pointing fingers at the other side of the aisle. On November 7, 2026, he also turned the spotlight on himself.
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The former chair admitted he made a mistake while shepherding the Digital Asset Market Clarity Act, better known as the CLARITY Act. His decision was to split stablecoin rules off from the broader market structure legislation.
He now says that move slowed the bill’s path to passage, and he took full ownership of the strategic error.
The logic behind the regret is fairly intuitive. Bundling stablecoins with market structure would have kept both issues moving as a single package. Separating them meant the market structure piece had to stand on its own, and it never crossed the finish line before the political ground shifted.
Not all doom and gloom
For all his warnings, McHenry is not predicting a crypto winter on Capitol Hill. On November 9, 2026, he said an anti-crypto bill would likely fail in the incoming Democratic House.
His reasoning rests on the coalition that has formed around the industry. McHenry argued that bipartisan support for pro-crypto policy is stronger than it has ever been.
In his view, there is enough cross-party collaboration to block legislation that is openly hostile to the sector.
Meanwhile, House Democrats are reportedly working on their own market structure framework. That effort is said to build on pieces of Waters’s earlier proposals, including the consumer-focused Bill of Rights.
The new framework may also try to balance oversight between the SEC and the CFTC.
