CLARITY Act Democrats Could Draft Own Bill, Dare Trump Veto

Editor’s take (Keshav Aggarwal): I think Democrats will certainly draft their own bill now that they have power after the midterms. I see that as good news for ordinary crypto holders because it gives clarity that politicians won’t enter crypto, and I’d tell readers to wait for the act unless Trump vetoes it.

CLARITY Act Democrats could write their own version of the stalled crypto market-structure bill and put it in front of President Donald Trump, daring him to veto it, former Commodity Futures Trading Commission Chairman Chris Giancarlo said in a November 11 interview with Bitcoin Magazine.

Giancarlo, known in the industry as “Crypto Dad,” said Democrats — set to control both chambers of Congress from January 3 — may find it politically useful to redraft the legislation around their priorities and send it to the White House.

“We dare you to veto it,” Giancarlo said, describing the challenge Democrats could issue after passing their own bill.

What a Democratic draft would change

Giancarlo said he had heard that Representative Maxine Waters intends to retain roughly 80% of the existing CLARITY Act, with the remaining 20% made up of changes introduced by Democrats.

According to crypto.news, House Democrats have discussed legislation that would give the Securities and Exchange Commission more authority over cryptocurrencies while limiting the CFTC’s responsibilities.

The proposal reportedly draws on Waters’ earlier Crypto Investor and Consumer Bill of Rights amendment, which included custody protections, withdrawal safeguards and reserve reporting requirements. Democrats have also discussed provisions addressing the crypto interests of elected officials, including Trump and members of his administration.

Giancarlo said he expects Democratic opposition to focus more heavily on the president and his family’s involvement in crypto than on trying to stop the industry’s development. He argued that a renewed campaign against the industry would be politically difficult, particularly after crypto companies continued operating through the regulatory disputes of the Biden administration.

Background: how the bill stalled

The CLARITY Act Democrats would inherit stalled in September, when the Senate failed to advance a procedural motion by a vote of 49 to 50. The measure needed 60 votes to move forward. Seven Democratic senators subsequently expressed interest in continuing negotiations, but disagreements over ethics provisions and consumer protections remained unresolved.

Giancarlo warned that a Democratic proposal could diverge considerably from the current text as lawmakers attach unrelated priorities during negotiations. He raised the possibility of restrictions, prohibitions and proposals concerning credit card fees entering the discussion, drawing a comparison with the negotiations around the Dodd-Frank financial reform law. In that scenario, he said, Trump could reject the bill on the grounds that its provisions were no longer primarily concerned with cryptocurrencies.

Why CLARITY Act Democrats might want a veto fight

Giancarlo suggested the move could allow Democrats to position themselves as supporters of crypto regulation while putting pressure on Trump to approve legislation drafted by the opposing party.

Waters is expected to lead the House Financial Services Committee, with Warren potentially chairing Senate Banking — the two panels with jurisdiction over the SEC and CFTC. Giancarlo acknowledged the strategy would require support from prominent Democratic lawmakers, including Senators Elizabeth Warren and Sherrod Brown, whose positions on crypto regulation have frequently differed from Republicans’.

The turf question between the SEC and the CFTC

Giancarlo argued that the renewed debate over which agency should supervise crypto markets is “less about good regulation and more about turf,” saying jurisdictional disputes are often influenced by political power and the industries overseen by congressional committees.

He described the agencies’ core differences: the SEC specializes in disclosure requirements intended to address information gaps between companies and investors, while the CFTC focuses on market integrity, price formation and preventing manipulation. Congress, he said, should weigh those differences when deciding which agency supervises particular crypto products, ensure there is “no overlap” and confirm each regulator has the necessary expertise.

He praised cooperation between SEC Chairman Paul Atkins and CFTC Chairman Michael Selig, calling their coordination “quite a remarkable accomplishment,” and noted the two agencies have already developed a cooperative approach to digital asset oversight without waiting for Congress to settle jurisdiction.

Giancarlo also criticized the failure to fill vacant commissioner positions, arguing that bipartisan commissions produce better regulations because members must work through disagreements. “I’m a big believer in a full commission structure,” he said.

What to watch next

• Committee gavels on January 3. Waters is expected to lead the House Financial Services Committee and Warren may chair Senate Banking.
• Whether the 80/20 split holds. Giancarlo said Waters intends to retain roughly 80% of the existing CLARITY Act, with 20% Democratic changes.
• Ethics provisions. Disagreements over ethics provisions and consumer protections remained unresolved, and Democrats have discussed provisions addressing the crypto interests of elected officials.
• Agency practice over statute. The SEC and CFTC have already developed a cooperative approach to digital asset oversight without waiting for Congress.

He also pointed to DTCC’s tokenized collateral work as evidence that Wall Street is moving toward digital network finance regardless of what happens in Washington.

Frequently asked questions

What did Chris Giancarlo say Democrats could do with the CLARITY Act?

In a November 11 interview with Bitcoin Magazine, the former CFTC chairman said Democrats could rewrite the crypto market-structure bill around their priorities and present it to President Trump, adding: "We dare you to veto it."

How much of the CLARITY Act would Democrats keep?

Giancarlo said he had heard that Representative Maxine Waters intends to retain roughly 80% of the existing CLARITY Act, with the remaining 20% consisting of changes introduced by Democrats.

Why did the CLARITY Act stall in the Senate?

The Senate failed to advance a procedural motion in September by a vote of 49 to 50; the measure needed 60 votes. Seven Democratic senators later expressed interest in continuing negotiations, but ethics provisions and consumer protections remained unresolved.

Sources: crypto.news, Bitcoin Magazine