US House Democrats have begun work on revising the market structure bill that sets regulatory rules for the cryptocurrency market, aiming it at the next Congress. Building on the Clarity Act, which passed the House in July 2025 under Republican leadership, talks are proceeding in the direction of expanding the oversight authority of the US Securities and Exchange Commission (SEC) and limiting the role of the US Commodity Futures Trading Commission (CFTC).

According to multiple industry sources, the discussions include a plan to expand into a new market structure bill the provisions of a "Crypto Investor and Consumer Bill of Rights" amendment that House Democrat Maxine Waters submitted to the Clarity Act in 2025. That amendment was presented during House deliberations but was not adopted, and in the September Senate vote the Clarity Act itself failed to reach the 60 votes needed to proceed, with 49 in favor and 50 against. The current talks will incorporate those rejected provisions as well as elements that Senate Democrats had agreed with Republicans before the September vote.

One focal point is the allocation of authority among regulators. The current Clarity Act adopts a design in which the CFTC has jurisdiction over the spot markets of covered cryptocurrencies, while the SEC oversees securities and investment contracts. The Democratic proposal would shift this balance toward the SEC and strengthen oversight of transactions with securities characteristics.

Adding ethics provisions is also seen as likely. These would restrict cryptocurrency-related activities by President Donald Trump and other senior federal officials, with Democrats positioning the prevention of conflicts of interest among public officials as a condition for passing the bill. Republicans frame this as a "messaging bill" meant to broadcast political arguments rather than policy, and are pushing back.

Behind this lies the outcome of the November 2026 midterm elections, in which Democrats recaptured majorities in both the House and Senate. The new Congress convenes in January 2027, with Democrats holding the legislative agenda and committee chairmanships. They secured 54 of 100 Senate seats and 228 of 435 House seats, surpassing the majority threshold in both chambers.

The lineup of congressional leadership will also shape the direction of regulation. On the Senate Banking Committee, industry critic Sherrod Brown is expected to become chairman; during his tenure he has halted deliberations on crypto-related legislation. On the House Financial Services Committee, Waters is seen as likely to return. She served as chair from 2019 to 2023 and criticized the GENIUS Act as "flawed" when it was enacted.

Democrats are not monolithic. While lawmakers with tough stances on the industry hold key committees, a certain number of moderates and crypto-friendly members who seek clearer rules also exist. Moderates make stronger consumer protection and conflict-of-interest rules for public officials preconditions for supporting the bill—a point that could serve as a starting point for negotiations with Republicans.

Democrats' stated priority is investigating the Trump family's cryptocurrency venture, World Liberty Financial (WLF). Investors linked to the Abu Dhabi royal family reportedly acquired 49% of WLF shares for about $500 million four days before the president's inauguration, and Democrats have called for Senate hearings. Waters has also demanded an investigation into the SEC's withdrawal of more than 10 crypto enforcement cases. By gaining the authority as committee majority to issue subpoenas, investigations may take precedence over legislation.

Republicans are on the defensive. Ending debate on a bill in the Senate requires 60 votes, giving the minority certain means of resistance. The presidential veto also remains. However, crypto-friendly Senator John Husted and Representative Bryan Steil, chairman of the House Digital Assets Subcommittee, lost their races, diminishing their influence. The Republican focus is expected to shift to preserving the already-enacted GENIUS Act and supporting rulemaking by the SEC and CFTC under existing authorities.

The market impact is likely to manifest as prolonged regulatory uncertainty. Reviving the Clarity Act will require adding consumer protection and ethics provisions, and friction with the White House is expected. For crypto-related companies, the finalization of their legal status at the federal level will be postponed, while strengthened SEC-led oversight and prolonged congressional investigations will weigh on the business environment. Investors enter a phase of gauging the direction and pace of regulation while watching committee appointments, WLF-related investigative developments, and whether moderate Democrats can compromise with Republicans on ethics provisions.

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