Twelve Democratic senators called for Republican cooperation on comprehensive crypto market structure legislation, proposing bipartisan authorship in regulatory efforts.
Senator Ruben Gallego led the Sept. 19 statement alongside Mark Warner, Kirsten Gillibrand, Cory Booker, and eight other Democrats seeking “true collaboration” on legislation addressing regulatory gaps that have left businesses and investors without explicit protections.
The lawmakers wrote:
“We hope our Republican colleagues will agree to a bipartisan authorship process, as is the norm for legislation of this scale. Given our shared interest in moving forward quickly on this issue, we hope they will agree to reasonable requests to allow for true collaboration.”
The senators emphasized the need for “mutual understanding” while moving forward quickly on digital asset regulation. The Democratic framework centers on seven key pillars to close oversight gaps and restore investor confidence.
The proposal would grant the Commodity Futures Trading Commission (CFTC) complete jurisdiction over spot markets for digital commodities that do not qualify as securities, resolving regulatory ambiguity between the CFTC and Securities and Exchange Commission (SEC).
Expanding CFTC authority
According to a 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.
Under crypto-native business models, the CFTC and SEC would receive expanded funding and authority to regulate custody, margin requirements, and conflicts of interest.
One of the core components of the proposal is platform regulation, which aims to standardize supervision of crypto exchanges akin to traditional securities exchanges.
The framework calls for dual regulatory approaches, empowering the SEC to integrate tokenized securities into existing disclosure regimes while directing the CFTC to police non-security digital assets.
The proposal also includes provisions preventing public officials from profiting from digital asset projects. It referenced President Donald Trump’s financial entanglements with crypto initiatives and seeks to bar elected officials and their families from issuing or profiting from tokens while in office.
It also mandates disclosure of all digital asset holdings.
Comprehensive rules
Under the proposal, anti-money laundering requirements would extend to all digital asset intermediaries, including foreign entities serving US customers, meaning FinCEN registration and sanctions compliance.
Additionally, DeFi protocols would face scrutiny for compliance vulnerabilities under the proposed oversight model.
The framework preserves GENIUS Act provisions prohibiting stablecoin issuers from offering interest-bearing products while directing regulators to develop new oversight models for decentralized finance protocols. It aims to safeguard traditional markets from the destabilizing effects of unregulated innovations.
The proposal also mandates comprehensive registration and compliance obligations across the digital asset ecosystem to prevent criminal exploitation. It will apply to both centralized and decentralized platforms.
The framework requires cross-party commissioner quorums for SEC and CFTC rulemaking while enabling rapid hiring of staff with digital assets expertise.
The authors stated the proposal “represents a turning point,” ensuring America leads financial innovation rather than adversaries.
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