Twelve Democratic senators have come together to urge Republican cooperation on a comprehensive crypto market structure legislation. Led by Senator Ruben Gallego, the group includes Mark Warner, Kirsten Gillibrand, Cory Booker, and eight other Democrats who are calling for bipartisan authorship in regulatory efforts.
In a statement released on Sept. 19, the senators emphasized the need for true collaboration in addressing regulatory gaps that have left businesses and investors without explicit protections. They hope their Republican colleagues will agree to a bipartisan authorship process, as is the norm for legislation of this scale. The goal is to move forward quickly on digital asset regulation while ensuring mutual understanding among all parties involved.
The proposed legislation focuses on seven key pillars to close oversight gaps and restore investor confidence. One of the key aspects of the proposal is granting the Commodity Futures Trading Commission (CFTC) complete jurisdiction over spot markets for digital commodities that do not qualify as securities. This would resolve regulatory ambiguity between the CFTC and the Securities and Exchange Commission (SEC).
Under the framework shared on Sept. 9, the legislation would provide the CFTC with new registration and enforcement authority over crypto trading platforms, requiring mandatory disclosures and consumer protections. The CFTC and SEC would receive expanded funding and authority to regulate custody, margin requirements, and conflicts of interest under crypto-native business models.
The proposal also includes provisions to prevent public officials from profiting from digital asset projects, mandating disclosure of all digital asset holdings. Anti-money laundering requirements would extend to all digital asset intermediaries, including foreign entities serving US customers, requiring FinCEN registration and sanctions compliance.
DeFi protocols would face scrutiny for compliance vulnerabilities under the proposed oversight model, and stablecoin issuers would be prohibited from offering interest-bearing products. The framework aims to safeguard traditional markets from the destabilizing effects of unregulated innovations and mandates comprehensive registration and compliance obligations across the digital asset ecosystem.
The authors of the proposal believe it represents a turning point in ensuring that America leads financial innovation rather than adversaries. The framework also calls for cross-party commissioner quorums for SEC and CFTC rulemaking and enables rapid hiring of staff with digital assets expertise.
Overall, the proposed legislation seeks to establish comprehensive rules for the digital asset market, addressing regulatory gaps and restoring investor confidence. With bipartisan support and a focus on collaboration, the senators hope to move quickly towards a more secure and regulated crypto market.