---
title: "House Democrats Prepare Market Structure Bill Expanding Waters Proposal"
description: "Lawmakers are drafting legislation to replace the stalled CLARITY Act, strengthening SEC jurisdiction and imposing ethics rules."
url: https://basisdesk.news/news/house-democrats-market-structure-bill-clarity-act-replacement
published: 2026-11-05T13:26:13.133Z
modified: 2026-11-05T13:26:13.133Z
section: Regulation & Policy
author: Basis Desk Newsroom (AI-generated, source-verified)
sentiment: neutral
tickers: [BTC, ETH]
tags: [CLARITY Act, Maxine Waters, House Financial Services Committee, SEC, CFTC, market structure]
license: Quote with attribution to Basis Desk (basisdesk.news). Not financial advice.
---

# House Democrats Prepare Market Structure Bill Expanding Waters Proposal

Lawmakers are drafting legislation to replace the stalled CLARITY Act, strengthening SEC jurisdiction and imposing ethics rules.

## At a glance

- **What happened:** House Democrats began drafting a broad crypto market structure bill expanding Representative Maxine Waters' previous proposals.
- **Why it matters:** The bill would assign primary oversight to the SEC over the CFTC and introduce federal ethics limits on digital asset holdings.
- **Who is affected:** US crypto trading venues, token issuers, and federal executive officials.
- **What's next:** Introduction and negotiation of the draft bill during the next congressional session targeting passage in 2027.
- **Status:** proposed
- **Primary source:** [Morning Minute: Democrat Sweep Pumps Crypto as Clarity Act Resurfaces](https://decrypt.co/382603/morning-minute-democrat-sweep-pumps-crypto-as-clarity-act-resurfaces) — decrypt.co

## Key points

- House Democrats plan to convert the Crypto Investor and Consumer Bill of Rights into a full market structure bill for the next Congress.
- The emerging draft expands the SEC's supervisory role over crypto markets while paring back authority previously slated for the CFTC.
- Proposed legislation includes ethics rules restricting crypto activities for federal officials, targeting formal passage in 2027.

## Editorial remark

- **Context:** The push follows the collapse of the CLARITY Act after a failed Senate cloture vote in September, after which digital asset market structure negotiations were widely considered stalled.
- **Impact:** U.S. crypto exchanges and market participants face potentially broader direct supervision by the SEC rather than the CFTC, alongside tighter conflict-of-interest limits for public officials.
- **Watch:** Committee assignments and draft text releases from the House Financial Services Committee when the new Congress convenes ahead of 2027.

House Democrats have begun discussions to expand Representative Maxine Waters' Crypto Investor and Consumer Bill of Rights into a comprehensive digital asset market structure bill for the upcoming Congress, according to reporting cited by Decrypt [1]. The prospective legislation would seek to incorporate Democratic revisions to the CLARITY Act that were rejected in 2025, alongside terms previously agreed to by bipartisan Senate negotiators prior to a failed September cloture vote [1]. Waters is positioned as the incoming chair of the House Financial Services Committee, signaling a push toward legislative drafting rather than exploratory hearings [1].

Under the framework being considered by lawmakers, regulatory jurisdiction would shift toward the Securities and Exchange Commission, reducing the oversight mandate originally designated for the Commodity Futures Trading Commission [1]. The draft also incorporates ethics provisions that would restrict the cryptocurrency holdings and activities of federal officials, including Donald Trump [1]. These requirements reflect long-standing Democratic priorities that previously complicated bipartisan consensus before the midterm elections, as explored in recent coverage on [Democrats securing a Senate majority](https://basisdesk.news/news/democrats-win-senate-majority-crypto-policy-clarity-act) [1].

## Market Impact and Next Steps

The legislative reset follows a volatile trading window following the midterm election results. $BTC fell below $76,000 on Tuesday before climbing above $80,800 on Wednesday, alongside an 8% drop in WTI crude oil prices to $88 per barrel [1]. At the time of writing, $BTC traded at $79,591 and $ETH stood at $2,386. U.S. exchange-traded funds reversed an outflow streak on Wednesday, drawing $74 million in net inflows for spot Bitcoin funds and $53 million for spot Ethereum funds [1].

Proponents aim to advance the revised proposal during the legislative session in 2027 [1]. The bill must navigate committee hearings and floor votes in both chambers once the new Congress convenes, with regulatory jurisdiction and executive ethics mandates remaining central friction points [1].

## Sources

1. [Morning Minute: Democrat Sweep Pumps Crypto as Clarity Act Resurfaces](https://decrypt.co/382603/morning-minute-democrat-sweep-pumps-crypto-as-clarity-act-resurfaces) — decrypt.co, 2026-11-05

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Basis Desk Newsroom · AI-generated, source-verified · https://basisdesk.news/about/how-we-use-ai