Democrats plan crypto bill that hands the SEC the powers the Clarity Act gave the CFTC

House Democrats are preparing their own crypto market structure bill for the next Congress, one that would shift supervision of digital asset trading back toward the SEC and away from the CFTC, according to Token Times. The plan, discussed among Democratic staffers and described by three industry sources, would fold in the Crypto Investor and Consumer Bill of Rights that Maxine Waters offered as an amendment in July 2025 and that the House Rules Committee blocked 4-8 along party lines.

That blocked package is the substance of the pitch. It would have required round-the-clock customer service, insurance or SIPC-like coverage, fiduciary and best-execution duties, anti-front-running rules, bankruptcy-remote custody with 24-hour withdrawals and monthly auditor-attested proof of reserves, and more funding for both regulators. A second Democratic amendment from Joe Neguse, rejected by the same 4-8 margin, would have barred members of Congress, presidents and vice presidents from issuing or endorsing digital assets, previewing the ethics fight that later followed the bill to the Senate.

The agency split is where a Democratic bill would break most sharply with the Republican one. The House-passed Clarity Act directs the CFTC to regulate most digital commodity trading, including exchanges, brokers and dealers, and exempts tokens on mature blockchains from SEC registration in certain conditions, a design the industry backed. Moving that supervision back to the SEC would reverse it. Republicans are already calling the Democratic effort a messaging bill, and no text has been released.

The timing follows Tuesday's Democratic sweep of Congress. Waters, the top Democrat on the House Financial Services Committee, is in line to take the gavel in January from French Hill, the Clarity Act's sponsor. The Clarity Act passed the House 294-134 in July 2025 and failed a Senate cloture vote 49-50 on 15 September; a motion to reconsider preserves another vote, but the bill dies when this Congress ends on 3 January unless the lame-duck session revives it. "The industry and the Republicans screwed up. That was the best bill they were going to get," Ruben Gallego, a Senate Banking Committee member, said in comments reported by Bloomberg Law.

TD Cowen's Jaret Seiberg wrote that the sweep closes the door on Clarity for two years, and that Democratic investigations of the Trump family's crypto ventures may make it impossible to advance a version the crypto sector could back. Any Democratic bill would still need President Donald Trump's signature, leaving open whether an SEC-centred design can draw enough Republican votes or remains the messaging exercise Republicans describe.

What it means for Pakistan: For Pakistani exchanges, brokers and token issuers watching Washington, the practical effect is delay: the Clarity Act's CFTC-led framework, which the industry had backed, now looks unlikely to pass before this Congress ends on 3 January, and a Democratic replacement built around the SEC would not arrive until the next term. Pakistan's own regime is being built in parallel, with PVARA licensing virtual asset service providers under the Virtual Assets Act and the State Bank and SECP working on stablecoin and tokenisation rules, so Pakistani firms planning to serve or list dollar-denominated assets should expect US registration and disclosure expectations to stay unsettled for at least another two years.