House Democrats have begun discussing a crypto market structure bill for the next Congress that would give the Securities and Exchange Commission more oversight and revive investor protections proposed by Representative Maxine Waters.
Eleanor Terrett reported that the discussions involve expanding Waters Crypto Investor and Consumer Bill of Rights amendment into a market structure proposal. Her account cited three industry sources who had spoken with Democratic staffers.
????SCOOP: House Democrats are discussing plans to expand the Crypto Investor and Consumer Bill of Rights, @RepMaxineWaters amendment to the Clarity Act in 2025, into a broader crypto “market structure” bill next Congress.
The proposal would fold in Democratic Clarity Act…
— Eleanor Terrett (@EleanorTerrett) November 4, 2026
The proposal would draw from Democratic amendments offered during the House‘s consideration of the CLARITY Act in 2025, alongside provisions negotiated between Senate Democrats and Republicans before September’s unsuccessful procedural vote.
Republicans have described the effort as a “messaging bill,” according to Terrett. Her report described discussions about legislation for the next Congress, with the allocation of regulatory authority and restrictions on officials financial interests among the subjects being considered.
Crypto market structure discussions revisit SEC authority
Among the ideas described in Terretts report are a larger supervisory role for the SEC and a more limited remit for the Commodity Futures Trading Commission. Further ethics provisions would likely address the crypto activities of Trump and other federal officials.
The Republican-led CLARITY framework would give the CFTC authority over covered spot digital commodity markets while preserving SEC jurisdiction over securities and investment contracts.
Before Septembers vote, the final Republican proposal included registration routes for digital commodity exchanges, brokers and dealers. Its sponsors said the revised text incorporated 126 substantive changes requested by Democratic negotiators.
Ethics negotiations included requirements for covered officials to divest certain substantial crypto-related interests or place them in a blind trust. Republican sponsors said the restrictions would cover federally elected officials, federal judges and their spouses.
Democrats continued seeking stronger restrictions despite those concessions. The latest discussions described by Terrett would bring ethics provisions back into the drafting process.
Waters investor protections faced a procedural defeat
The House Rules Committees official record identifies Waters investor protection package as amendment 31 to the 2025 CLARITY Act.
A motion to make the amendment eligible for consideration was defeated 4–8. The vote concerned whether the amendment could be considered, rather than final passage of a standalone investor protection law.
The committees summary lists round-the-clock customer service, insurance or protection comparable to Securities Investor Protection Corporation coverage, fiduciary duties and best-execution requirements among its provisions.
Other measures addressed front-running, bankruptcy-remote custody, withdrawals within 24 hours, and monthly reserve reporting accompanied by an auditors attestation. The amendment proposed funding for both the SEC and CFTC.
A separate Waters amendment, numbered 30, incorporated the Stop TRUMP in Crypto Act, targeting crypto conflicts of interest involving the president, vice president, members of Congress and their immediate families.
The committee record lists further Democratic proposals concerning presidential token ownership, endorsements and trading restrictions, each submitted as a separate amendment.
The 2025 text sets out customer deadlines
Waters nine-page amendment text provides more specific conditions for the consumer protections outlined in the committee summary.
Covered businesses would have to honor cash withdrawals or digital asset transfers within 24 hours, except where a documented, good-faith fraud concern existed. Human telephone or live-chat support would operate continuously, with connection waits capped at five minutes.
Customer assets would be segregated in bankruptcy-remote accounts. Lending, staking or reusing those assets would require affirmative consent that customers could revoke.
Businesses holding customer assets would publish cryptographically verifiable reserves at least monthly, accompanied by an attestation from a licensed public accountant.
The text required notification within 48 hours of discovering a security breach compromising customer assets or personal information. Its definition of covered entities included exchanges, brokers, dealers and custodians under either agencys jurisdiction that provide digital asset services to retail customers.
CLARITYs failed vote left reconsideration possible
As crypto.news previously reported, the September cloture vote failed 49–50, short of the 60 votes required to begin Senate consideration.
Senator Thom Tillis changed his vote to no for procedural reasons, preserving an avenue to seek reconsideration. The vote did not constitute final rejection of the House-passed legislation.
Afterward, former CFTC Chairman J. Christopher Giancarlo said the SEC and CFTC could continue developing digital asset frameworks using their existing authority.