Democrats’ SEC Power Play Gives the CLARITY Act a Second Life

House Democrats are discussing a broader crypto market structure bill for the next Congress that could expand Securities and Exchange Commission oversight, limit the Commodity Futures Trading Commission’s authority and revive investor protections proposed by Rep. Maxine Waters.

Journalist Eleanor Terrett reported on November 4, 2026, that lawmakers want to expand Waters’ Crypto Investor and Consumer Bill of Rights, an amendment to the CLARITY Act introduced in 2025. No new bill has been introduced; three industry sources who spoke with Democratic staffers described the discussions. The proposal follows Democrats’ November 3 election victories and could reopen negotiations on the stalled legislation.

Waters’ 2025 proposal called for isolating customer funds, processing withdrawals within 24 hours, monthly proof-of-reserves reports from an auditor, protection against front-running and 24/7 customer support. The new effort could also incorporate protections negotiated by Senate Democrats and Republicans before the legislation’s procedural vote failed in September. The Senate fell short of the 60 votes required to begin debate on the House-passed bill.

The reported proposal would give the SEC greater supervisory powers over crypto markets while reducing the CFTC’s role. It could also restrict President Trump’s cryptocurrency activities. Ripple executives have called for bipartisan regulatory cooperation as Democrats reconsider the framework.

Stand With Crypto endorsed 45 candidates in the midterms, recording 27 pro-crypto wins, 12 losses and six races still live at the time of its election tracker update. The organization said more than 50 pro-crypto new members were heading to Congress, including Democrats Chris Pappas in New Hampshire and James Talarico in Texas, alongside Wyoming Republican Harriet Hageman. In Florida’s 9th District, Darren Soto won by 1,477 votes.

CoinShares research head James Butterfill described Republican Bryan Steil as a “meaningful loss” for crypto after the Wisconsin congressman chaired the House digital assets subcommittee and worked on advancing the CLARITY Act. Butterfill said supporters now need to convert their backing into passage, while GSR vice president of research Carlos Guzman said: “I wouldn’t say it’s game over for Clarity, but passing it has become tougher.”