Senate Democrats are pushing a sweeping reset of U.S. cryptocurrency oversight, releasing a framework that aims to settle years of jurisdictional tug-of-war and give investors clearer rules of the road.
The plan, outlined by a group of 12 senators, sketches seven priorities that would shape a forthcoming market structure bill and could shift the center of gravity for digital-asset regulation.
At the core is an attempt to sort out what counts as a security and what does not. The framework signals that tokens not meeting the legal test for securities would be regulated by the Commodity Futures Trading Commission.
That would formalize a lane many market participants have sought, reducing the gray area that has left projects and exchanges guessing which statute applies. A cleaner classification process would also set expectations for token issuers before they reach the market.
The proposal calls for stronger disclosure duties from issuers that means more consistent information on how a token functions, who controls its supply, and what rights or risks buyers actually receive.
Clearer documentation has been a missing piece for retail investors who often rely on marketing claims or fragmented technical papers when deciding whether to buy.
Trading venues would face tougher compliance requirements. The framework points to higher standards for surveillance, custody, and customer asset protections, along with measures designed to curb illicit finance.
Exchanges have already moved toward bank-style controls, but a codified rulebook would raise the floor across the industry and could pressure offshore platforms that serve U.S. users without registering here.
To enforce the rules that already exist, as well as any that emerge from this push, the plan seeks more money for the Securities and Exchange Commission, the CFTC, and the Treasury Department.
The agencies have warned for years that their mandates have outgrown their staffing. Fresh funding would pay for exams, litigation, and specialized technology, all of which factor into the pace and consistency of enforcement.
It proposes restrictions on public officials and their families from profiting from crypto projects while in office, along with asset disclosure requirements. Lawmakers are framing this as a trust measure intended to limit conflicts at a time when policy decisions can move token prices within minutes.
A durable line between securities and commodities could lower legal uncertainty for non-security tokens, make listing decisions more predictable for exchanges, and give venture backers a clearer path to public trading.
Stricter platform rules and expanded policing would raise operating costs for intermediaries. The mix could favor better-capitalized firms while squeezing lightly regulated venues and thin-margin projects.
The senators issued a blueprint, not bill text, and they did not release a detailed timeline. Any legislation would still need to clear committee review, survive amendments, and pass both chambers before a presidential signature. Even then, federal agencies would have to write rules and defend them in court. Those steps often determine how ambitious ideas play out in practice.
Markets will watch three signposts. First is how Congress defines the dividing line that sends a token to the SEC as a security or to the CFTC as a commodity.
Second is the scope of exchange obligations, especially on custody, stable operations during stress, and cross-border access.
Third is whether the funding boost for regulators matches the breadth of new duties, because under-resourced rulemaking tends to create bottlenecks.
