Democrats unveil new market framework to counter Trump’s crypto footprint

Democrat lawmakers have introduced a comprehensive legislative blueprint aimed at reshaping U.S. digital asset regulation, proposing to close longstanding gaps in crypto oversight and restore investor confidence in the nearly $4 trillion market, according to a newly released framework.

The proposed plan would grant the Commodity Futures Trading Commission (CFTC) full jurisdiction over spot markets for digital commodities, tokens that do not qualify as securities, resolving the regulatory ambiguity that has left both businesses and investors without clear protections.

It also calls for the CFTC to be given new registration and enforcement authority, as well as mandatory disclosures and consumer protections for crypto trading platforms.

Tackling misconduct

The framework sets out seven core pillars for digital asset legislation, including clarifying token classification, adapting securities rules for token issuers, bringing crypto platforms under exchange-like regulation, and strengthening illicit finance safeguards.

It proposes a dual approach, empowering the SEC to integrate tokenized securities into existing disclosure regimes while instructing the CFTC to police non-security digital assets.

Both agencies would gain expanded funding and authority to regulate custody, margin, and conflicts of interest under crypto-native business models.

Significantly, the framework calls for new controls to prevent public officials from abusing digital asset projects.

It references 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, as well as mandates disclosure of all digital asset holdings.

DeFi and stablecoins

The bill also directs regulators to build new oversight models for DeFi protocols and to safeguard traditional markets from the destabilizing effects of unregulated innovations. It reiterates prohibitions on stablecoin issuers offering interest-bearing products, a provision preserved from the 2025 GENIUS Act.

To prevent criminal exploitation of the digital ecosystem, the framework mandates that all digital asset intermediaries, including those abroad serving U.S. customers, register with FinCEN and comply with anti-money laundering and sanctions obligations. DeFi protocols will also be scrutinized for compliance vulnerabilities.

Finally, the proposal highlights the need for bipartisan regulatory leadership. It would require the SEC and CFTC to maintain cross-party commissioner quorums for rulemaking and enable rapid hiring of staff with digital assets expertise.

According to the authors:

“This framework represents a turning point. It restores trust, prevents abuse, and ensures that America—not its adversaries—leads the next generation of financial innovation.”

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