Democrats Push Back With Alternative Framework
A group of 12 Democratic senators has unveiled a competing framework for U.S. crypto market structure legislation, setting the stage for a partisan showdown in Washington. The move comes as Republicans on the Senate Banking Committee prepare to advance their own bill, with a vote expected later this month.
Competing Visions for Market Structure
Both the Democratic and Republican frameworks emphasize regulatory clarity and outline how the SEC and CFTC should oversee digital assets. However, Democrats are more focused on consumer protections, anti-corruption measures, and illicit finance safeguards.
The Democratic document lays out “seven key pillars” aimed at strengthening oversight, particularly by “closing the gap in the spot market” for assets not considered securities. It also proposes limits on elected officials and their families from profiting off crypto while in office, a move clearly designed to address concerns about political conflicts of interest.
The framework went further, openly criticizing President Donald Trump, accusing him of undermining independent regulatory agencies and using digital asset projects for personal enrichment.
CFTC Leadership Crisis Raises Concerns
One of the Democrats’ central arguments is the current leadership vacuum at the CFTC. The commission is down to just one member, Acting Chair Caroline Pham, after other commissioners departed earlier this year.
Trump has nominated Brian Quintenz as the next CFTC chair, but the Senate has yet to confirm him. Pham has said she will leave once a replacement is in place, leaving uncertainty over the timeline.
Bill’s Chances of Passing Remain Unclear
The path to legislation remains uncertain. The House has already passed the CLARITY Act, a bipartisan market structure bill, while the anti-CBDC measure failed to attract Democratic support. Meanwhile, the Senate passed the GENIUS Act in July, creating a regulatory framework for stablecoins.
Still, it is unclear whether the same bipartisan support will extend to broader market structure reform. Democrats’ new recommendations, particularly those targeting corruption and Trump’s alleged conflicts of interest, could make consensus harder to achieve.
The Democratic document accused Trump of using crypto ventures, including World Liberty Financial, his memecoin, and a family mining project, to enrich himself. For skeptics like Senator Elizabeth Warren, such ties complicate any chance of smooth bipartisan cooperation.
A Long Road to 2026
Republicans aim to pass their bill out of the Banking Committee in October and the Agriculture Committee in November, with a goal of finalizing legislation by 2026. But the Democrats’ competing framework signals they are not ready to endorse the Republican timeline.
For now, the question remains whether both parties can reconcile their visions into a single law—or whether partisan divides will keep the U.S. crypto market structure unresolved for years to come.
