The need for “mutual understanding” was underscored by lawmakers as they move forward quickly on digital asset regulation.
Republican cooperation on comprehensive crypto market structure legislation was urged by a dozen Democratic senators, who proposed bipartisan authorship in regulatory efforts.
The Sept. 19 statement was led by Senator Ruben Gallego, accompanied by Mark Warner, Kirsten Gillibrand, Cory Booker, and eight other Democrats. They are seeking “true collaboration” on legislation addressing regulatory gaps that have left businesses and investors without explicit protections.
“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 lawmakers wrote:
A need for “mutual understanding” was stressed by the senators as they move forward quickly on digital asset regulation. The Democratic framework is based on seven core pillars to address oversight gaps and rebuild investor confidence.
Complete jurisdiction over spot markets for digital commodities that do not qualify as securities would be granted to the CFTC by the proposal, which would resolve regulatory uncertainty between the CFTC and SEC.
CFTC Authority to be Expanded
According to a framework shared on Sept. 9, new registration and enforcement authority over crypto trading platforms would be provided to the CFTC by the legislation, requiring mandatory disclosures and consumer protections.
Under crypto-native business models, expanded funding and authority would be provided to the CFTC and SEC for the regulation of custody, margin requirements, and conflaicts of interest.
Platform regulation, a core component of the proposal, is intended to standardize supervision of crypto exchanges similar to conventional securities exchanges.
Dual regulatory approaches are called for by the framework, which empowers the SEC to integrate tokenized securities into existing disclosure regimes while directing the CFTC to oversee non-security digital assets.
Provisions to prevent public officials from profiting from digital asset projects are also included in the proposal. It cited President Donald Trump’s financial entanglements with crypto initiatives and aims to bar elected officials and their families from issuing or profiting from tokens while in office.
Disclosure of all digital asset holdings is also mandated.
Comprehensive Rules Proposed
The scope of anti-money laundering requirements would be broadened under the proposal to include all digital asset intermediaries, even foreign entities serving US customers, requiring FinCEN registration and sanctions compliance.
Under the proposed oversight model, DeFi protocols would be scrutinized for compliance vulnerabilities.
GENIUS Act provisions prohibiting stablecoin issuers from offering interest-bearing products are preserved by the framework. It also directs regulators to develop new oversight models for decentralized finance protocols, with the aim of safeguarding traditional markets from the destabilizing effects of unregulated innovations.
Comprehensive registration and compliance obligations are also mandated by the proposal across the digital asset ecosystem to deter criminal exploitation. These requirements will apply to both centralized and decentralized platforms.
Cross-party commissioner quorums for SEC and CFTC rulemaking are required by the framework, which also enables the rapid hiring of staff with digital assets expertise.
The proposal was stated by the authors to represent a turning point, ensuring that America leads financial innovation rather than its adversaries.
