Senate Democrats Unveil Crypto Market Structure Framework to Define Regulation

Senate Democrats have introduced a new framework for cryptocurrency regulation, outlining how digital assets should fit within U.S. financial oversight. The proposal, backed by 12 lawmakers including Senators Mark Warner, Kirsten Gillibrand, Cory Booker, and Raphael Warnock, highlights seven key pillars designed to establish clearer rules for the crypto market.

The framework calls for defining regulatory jurisdiction between the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), ensuring consumer protection, addressing gaps in the crypto spot market, and preventing corruption and illicit finance. Lawmakers argue that the current patchwork of rules has hindered both innovation and investor safety.

The proposal would require crypto platforms to register as financial institutions with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and push issuers into a formal regulatory structure. It also emphasizes stronger safeguards against misuse of digital assets, including measures to prevent politicians and their families from profiting from crypto while in office.

Republicans on the Senate Banking Committee have already released drafts of their own crypto market structure bill, with Chairman Tim Scott aiming for passage by September. The Democratic framework represents the most comprehensive response yet, setting the stage for bipartisan negotiations.

Senator Elizabeth Warren criticized GOP proposals as partisan, urging for legislation that can realistically pass both chambers. Meanwhile, White House crypto adviser Patrick Witt noted Republicans are seeking Democratic input to shape a viable bill.

By addressing regulatory clarity, consumer protection, and anti-corruption measures, Democrats aim to create a balanced digital asset market framework. With bipartisan support essential, the debate over crypto regulation is intensifying as lawmakers seek to bring oversight, stability, and transparency to the rapidly evolving industry.