Democrats Propose New Crypto Regulatory Framework to Counter Trump’s Influence

Democrat lawmakers have unveiled a legislative blueprint aimed at overhauling U.S. digital asset regulation. The proposal seeks to close regulatory gaps in the nearly $4 trillion crypto market, with a focus on restoring investor confidence.

The framework grants the CFTC jurisdiction over spot markets for digital commodities, resolving long-standing ambiguity. It also mandates new registration requirements, enforcement powers, and consumer protections for crypto trading platforms.

Seven core pillars form the foundation of the proposal, including clearer token classification, adapted securities rules for token issuers, and enhanced illicit finance safeguards. A dual regulatory approach WOULD see the SEC oversee tokenized securities while the CFTC polices non-security digital assets.

Both agencies would receive expanded funding and authority to regulate custody, margin lending, and conflicts of interest inherent in crypto-native business models. The plan represents the most comprehensive Democratic counterproposal to date on digital asset regulation.