House Democrats are discussing a crypto market structure bill for the next Congress that could revive customer custody safeguards and expand Securities and Exchange Commission (SEC) oversight of digital assets, according to a November 5 report from Crypto In America. The outlet cited four industry sources who spoke with Democratic staff.

The proposal would build on Representative Maxine Waters' rejected investor protection amendment. The reported measure could expand SEC authority while limiting the Commodity Futures Trading Commission's (CFTC) oversight role. No bill text has been released, and its final provisions remain uncertain. The talks follow Democrats' November 3 election victories, which secured control of both congressional chambers — a majority that carries committee chairmanships and agenda-setting authority in the incoming Congress. No formal introduction date has been announced.

Waters' Earlier Proposal Sets Specific Customer Standards

The House Rules Committee's 2025 records provide the clearest outline of potential consumer protections. Waters' Crypto Investor and Consumer Bill of Rights was introduced in 2025 as an amendment to the Clarity Act. It proposed customer withdrawals within 24 hours and bankruptcy-remote custody of assets — a structure that keeps customer holdings segregated from a firm's own property so they are not treated as company assets if the business enters bankruptcy.

The amendment also included round-the-clock customer service and monthly auditor-attested proof of reserves. Additional provisions proposed insurance or SIPC-like customer protection — a reference to the Securities Investor Protection Corporation, which covers customers when a registered brokerage fails — alongside fiduciary duties, best-execution standards, and anti-front-running restrictions.

Those measures were never enacted. The committee blocked consideration of amendment 31 in a 4–8 procedural vote on July 14, 2025 — a procedural decision rather than the rejection of a standalone law. Notably, the amendment also proposed funding for both federal market regulators, which differs from reports describing a more SEC-centered approach in the current discussions.

Expanded SEC Authority Would Reverse CLARITY's Approach

Journalist Eleanor Terrett first reported the Democratic discussions on November 4. Her initial account cited three industry sources, while the subsequent Crypto In America report, published November 5, cited four. The reported effort would fold Democratic proposals from the CLARITY Act debate into a broader measure.

🚨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

Under the options reportedly under discussion, the SEC would gain expanded authority while the CFTC's oversight role would be reduced — a reversal of CLARITY's CFTC-led framework for covered digital commodity spot markets. That jurisdictional question — which agency supervises digital asset spot trading, and under which rulebook — has been the defining issue of Congress's market structure effort, since it determines which regulator's rules and enforcement powers apply to trading platforms.

The Senate rejected a motion to advance CLARITY on September 15, 2026, by a vote of 49–50. Senator Thom Tillis subsequently moved to reconsider the procedural vote, leaving open the possibility of another attempt. Justin Slaughter, an adviser at crypto investment firm Paradigm, said the Democratic proposal has been in development since the summer, an account that places the drafting discussions before November's election results.

DeFi and Government Ethics Remain Unresolved

Sources also described potential restrictions on crypto-related financial interests held by Trump and other federal officials. Waters' separate 2025 amendment 30 addressed conflicts of interest involving presidents, vice presidents, lawmakers, and their immediate family members.

Other Democratic amendments separately proposed tailored anti-money-laundering requirements for decentralized finance (DeFi). An unnamed Democratic strategist told Crypto In America that the sector could face intermediary-style requirements — obligations of the kind currently imposed on centralized intermediaries such as exchanges — although no published draft establishes such obligations.

Republican sources dismissed the effort as a “messaging bill” — a term for legislation aimed chiefly at signaling political priorities rather than becoming law — according to the outlet. Any bill would require approval from both chambers of Congress and Trump's signature to become law, and Congress could also vote to override a presidential veto. The release of bill text would mark the first concrete indication of how far the proposal reaches beyond Waters' earlier standards.