House Democrats draft crypto bill with more SEC muscle and Trump ethics curbs

House Democrats aren't waiting for the gavel. According to crypto journalist Eleanor Terrett, Democratic staff are already sketching out a broad crypto market structure bill for the next Congress — and they're building it on top of Rep. Maxine Waters' Crypto Investor and Consumer Bill of Rights.

Terrett, citing three industry sources briefed on the talks, said the plan would fold in the Democratic provisions that surfaced during negotiations over the CLARITY Act, the market structure package that stalled out in September. The proposal could land when the new Congress convenes on January 3, 2027. Waters first floated her investor protection blueprint in 2025.

The sharpest fight is shaping up over who gets the keys. Under the discussions, the SEC would pick up more authority over crypto trading and market activity, while the CFTC's role would shrink. That's the opposite of what much of the industry has spent years lobbying for — plenty of companies would rather the CFTC run the show — so expect sparks when the bill hits the floor.

Ethics language is the other big piece. The draft could bar senior government officials from launching, promoting or cashing in on crypto ventures while in office, with rules extending to their immediate families. Waters set the tone in May 2025 with her Stop TRUMP in Crypto Act, and Democrats now want a closer look at Trump's family crypto interests after reports his crypto businesses pulled in roughly $1.4 billion.

Republicans aren't impressed. They've reportedly branded the effort a 'messaging bill,' arguing it's aimed at Trump's crypto empire rather than at rules both parties can live with. Still, with Democrats set to control both chambers, the proposal doubles as a signal of how the new Congress intends to handle digital assets.

The chatter lands in a jumpy market. Bitcoin has climbed back above $81,000, while the broader crypto market absorbed close to $987.33 million in liquidations over 24 hours — $566.59 million of that, or 57.4%, from shorts getting torched.