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The US crypto regulation bill that industry insiders have been anticipating for months finally arrived Monday, marking what could become the most consequential regulatory framework for digital assets in American history. The Senate Agriculture Committee released a discussion draft that would fundamentally reshape how cryptocurrencies are overseen, placing the Commodity Futures Trading Commission at the center of a new regulatory architecture.
This isn’t just another piece of proposed legislation gathering dust in committee rooms. The bipartisan draft, unveiled by Agriculture Chair John Boozman (R-Ark.) and Sen. Cory Booker (D-N.J.), represents a critical step toward ending years of regulatory confusion that has plagued the crypto industry and left investors vulnerable to scams, market manipulation, and institutional uncertainty.
“This is the most consequential roadmap for how an institution is going to integrate digital assets into their business,” Cody Carbone, CEO of crypto trade association Digital Chamber, told CNBC. “It’s like the best possible step-by-step of what type of compliance rules requirements they would need to follow to work with crypto.”
The US Crypto Regulation Bill Shifts Power to the CFTC
The draft legislation fundamentally reorders the regulatory landscape by granting the CFTC exclusive authority over spot digital commodity markets. For years, the Securities and Exchange Commission dominated crypto oversight through an aggressive enforcement strategy that critics derided as “regulation by enforcement.” That era appears to be ending.
Under the proposed framework, major cryptocurrencies like bitcoin and ether would be classified as “digital commodities” rather than securities, placing them squarely under CFTC jurisdiction. This distinction matters enormously for institutional adoption. Compliance departments at major financial firms have been paralyzed by regulatory ambiguity, unable to commit capital without clear legal guidance.
“Compliance and risk departments will finally have a federal statute to point to,” Juan Leon, an analyst at crypto-focused asset manager Bitwise, explained to CNBC. “This shifts the internal conversation and provides the legal certainty required to move assets into a formal, strategic allocation.”
The shift represents a philosophical departure from the SEC’s approach under previous leadership. While the securities regulator relied heavily on the 1946 Howey test to argue that most digital assets constituted investment contracts, the new framework creates statutory definitions that remove much of that interpretive discretion.
Breaking Up Crypto’s “All-in-One” Business Model
One of the most significant provisions in the US crypto regulation bill targets the integrated business models that have defined crypto exchanges. The draft requires companies to “establish governance, personnel, and financial resource separation among affiliated entities that perform distinct regulated functions.”
Translation: the days of crypto platforms operating as exchange, broker, custodian, and proprietary trading desk under one roof may be numbered. This structural separation mirrors requirements in traditional finance, where conflicts of interest are managed through corporate firewalls.
The collapse of FTX in 2022 exposed the dangers of these consolidated models. Sam Bankman-Fried’s empire commingled customer funds, used exchange deposits to fund risky bets at affiliated trading firm Alameda Research, and operated with virtually no internal controls. The resulting implosion wiped out billions in customer assets and sent shockwaves through the industry.
The new requirements would force crypto firms to adopt the kind of structural safeguards that traditional financial institutions have maintained for decades. Customer funds would need to be segregated. Conflicts of interest would require disclosure and management. The “move fast and break things” ethos that characterized crypto’s early years would give way to institutional discipline.
What the US Crypto Regulation Bill Means for Investors
For retail investors who have watched crypto markets swing wildly between euphoria and despair, the legislation promises tangible protections. The draft establishes listing standards requiring that digital commodities traded on exchanges are “not readily susceptible to manipulation.”
This provision directly addresses one of crypto’s most persistent problems: the proliferation of scam tokens, rug pulls, and pump-and-dump schemes that have cost investors billions. By requiring exchanges to vet assets before listing them, the framework creates accountability that has been largely absent.
The bill also mandates robust customer protections including fund segregation requirements, appropriate disclosure standards, and prohibitions on certain affiliated trading. These aren’t revolutionary concepts in finance, but they represent a significant upgrade for an industry that has operated in a regulatory gray zone.
Yet the draft leaves critical questions unanswered. Provisions around anti-money laundering rules and decentralized finance protocols remain bracketed, indicating lawmakers haven’t reached consensus. DeFi, which allows users to trade, lend, and borrow without intermediaries, poses unique regulatory challenges that traditional frameworks struggle to address.
“It’s critical that legislation distinguishes between centralized intermediaries and decentralized systems, and we look forward to working with the Committee to get it right,” Moonpay President Keith Grossman told CNBC.
The Long Road Ahead for US Crypto Regulation Bill
The discussion draft represents progress, but it’s far from becoming law. The Senate Agriculture Committee will spend coming weeks gathering feedback and refining the text. Many sections remain bracketed, reflecting ongoing negotiations between Republicans and Democrats.
The bill must eventually be combined with the Senate Banking Committee’s draft on digital asset market structure to create comprehensive legislation. That Banking Committee version, which focuses on securities law aspects, was released in July and takes a different approach to some key issues.
Both chambers of Congress will need to reconcile their versions before any bill reaches President Trump’s desk. The House passed its own crypto market structure legislation, the CLARITY Act, in July with bipartisan support. But merging House and Senate approaches could take months of negotiations.
“It’s not final, it’s not done, but this gives a good sense of where Congress is going and what the final rules may be,” Carbone said. He suggested it may be “almost impossible” to finalize this portion of the bill by year’s end.
The political dynamics remain complex. While crypto has emerged as a surprisingly bipartisan issue, with both parties recognizing the need for clear rules, disagreements persist over details. Some Democrats, including Senator Elizabeth Warren, have raised concerns about conflicts of interest given Trump’s personal crypto investments. The Trump family’s involvement in World Liberty Financial and various crypto projects has created awkward optics as the administration pushes for industry-friendly regulation.
Why This US Crypto Regulation Bill Matters for Democracy
Beyond the technical details of CFTC jurisdiction and custody requirements, this legislation carries broader implications for democratic governance and the rule of law. For years, the crypto industry operated in a regulatory vacuum, with agencies asserting authority through enforcement actions rather than clear rulemaking.
That approach undermined legal certainty and pushed innovation offshore to jurisdictions with clearer frameworks. The European Union’s Markets in Crypto-Assets (MiCA) regulation and the United Kingdom’s comprehensive crypto regime have provided the kind of regulatory clarity that the U.S. has lacked.
The new framework represents Congress reclaiming its constitutional role in setting regulatory boundaries. Rather than allowing agencies to expand their authority through aggressive interpretation of decades-old statutes, lawmakers are creating purpose-built rules for digital assets.
This matters for democratic accountability. When unelected regulators make policy through enforcement, the public has limited recourse. When Congress legislates, voters can hold their representatives accountable for the results.
The bill also addresses concerns about financial inclusion and access. By creating pathways for regulated crypto businesses to operate, the framework could expand access to financial services for underbanked populations. Stablecoins and digital assets offer potential solutions for cross-border payments, remittances, and financial services in communities that traditional banks have abandoned.
The Global Stakes of US Crypto Regulation Bill
America’s approach to crypto regulation will reverberate globally. The U.S. dollar’s role as the world’s reserve currency gives American policymakers outsized influence over global financial architecture. How the U.S. regulates stablecoins, which are predominantly dollar-denominated, will shape their adoption worldwide.
The legislation arrives as other major economies implement their own frameworks. The EU’s MiCA regulation took effect in 2024, creating comprehensive rules for crypto assets across the 27-member bloc. The UK has pursued a “same risk, same regulatory outcome” approach that applies existing financial regulations to crypto activities.
China has taken the opposite path, banning crypto trading and mining while developing a central bank digital currency. That authoritarian approach offers a stark contrast to the market-based framework emerging in democracies.
The U.S. crypto regulation bill stakes out a middle ground: clear rules that protect consumers and maintain market integrity while preserving space for innovation. Whether that balance succeeds will determine not just the future of American crypto markets, but the broader question of how democratic societies govern emerging technologies.
For an industry that has long operated on the fringes of the financial system, the path toward legitimacy runs through Washington. The discussion draft released Monday represents a significant milestone on that journey, even as the destination remains uncertain. The coming months of negotiations, amendments, and political wrangling will determine whether the U.S. can create a regulatory framework that protects investors without stifling innovation.
As the crypto industry matures and institutional capital flows in, the stakes have never been higher. The regulatory choices made today will shape financial markets for decades to come. Whether lawmakers get it right may determine if the U.S. remains the center of global finance or cedes that role to more nimble competitors.
The Trump administration’s recent moves, including pardoning Binance founder Changpeng Zhao, signal a dramatically different approach to crypto than previous administrations. Combined with this legislative push, 2025 could mark the year crypto finally moves from the regulatory wilderness into the mainstream of American finance.