Key Insights:
- The Senate Agriculture Committee released a crypto market structure draft on November 10, as crypto news narrative seemed to get better.
- The draft expands the House-passed CLARITY Act by detailing CFTC oversight of the spot market.
- The bills complement rather than compete, with the draft serving as the CFTC implementation layer.
The Senate Agriculture Committee released a bipartisan discussion draft on the crypto market structure on November 10, which explicitly builds upon the CLARITY Act passed by the House in July.
Senators John Boozman and Cory Booker introduced the 155-page draft, which grants new authority to the Commodity Futures Trading Commission (CFTC) to regulate digital commodities and creates the operational infrastructure needed to make CLARITY’s framework functional.
Senate Draft Defines CFTC Authority
The draft defines digital commodities as fungible digital assets recorded on public distributed ledgers that enable peer-to-peer transfer without reliance on intermediaries.
The proposal establishes a comprehensive CFTC registration framework, requiring digital commodity exchanges, brokers, and dealers to register with the Commission and adhere to mandatory customer fund segregation rules.
The draft prohibits certain affiliated trading and establishes conflict of interest safeguards for all registered intermediaries.
Additionally, it includes a new CFTC funding stream to support the expanded oversight, addressing concerns that the agency’s 543-person staff may struggle to handle new responsibilities compared to the SEC’s 4,200 employees.
The proposal protects self-custody rights and ensures individuals can engage in peer-to-peer transactions without intermediaries.
Developers and infrastructure providers are explicitly protected from being treated as money transmitters solely for creating or publishing software, addressing a key industry concern about overreach.
Crypto News: Comparing Senate Draft and CLARITY Act
The CLARITY Act is a comprehensive market structure bill that defines three categories of digital assets: digital commodities, investment contract assets, and permitted payment stablecoins.
The Act carves jurisdiction between the SEC and the CFTC while creating an issuance regime and registration framework for the entire digital asset ecosystem.
The Senate draft is narrower in scope, focusing specifically on CFTC spot market regulation while assuming CLARITY-style asset classification as context without restating the entire taxonomy.
Both bills aim to end regulation by enforcement, but CLARITY creates the three-bucket classification system while the Senate draft builds the operating infrastructure underneath that framework.
The Senate draft leaves stablecoin oversight to other legislation, such as the GENIUS Act, focusing solely on non-security, non-stablecoin digital commodities.
CLARITY addresses permitted payment stablecoins in coordination with banking regulators, making the two bills complementary pieces of a larger puzzle rather than competing frameworks.
Why This Matters for Crypto News
The Senate draft represents the missing piece in US crypto policy, completing a three-part regulatory framework alongside the CLARITY and GENIUS Act.
CLARITY drew lines between digital commodities, securities, and stablecoins, while the GENIUS Act created a federal stablecoin regime. The Senate Agriculture draft completes the puzzle by granting the CFTC explicit authority over the spot market, along with detailed operational requirements.
Together, these bills establish the first comprehensive nationwide market structure framework, shifting oversight from SEC enforcement actions to CFTC supervision based on clear statutory authority.
Bitcoin, Ethereum, and other digital assets are clearing the digital commodity bar, gaining de facto regulatory clarity, with predictable compliance pathways instead of case-by-case litigation.
The draft hardwires customer protections into law, based on lessons from FTX, including segregated assets, limited rehypothecation, clear bankruptcy treatment, and governance rules that transform US spot venues from “best-effort fintechs” into regulated intermediaries with institutional-grade safeguards.
The Senate Agriculture Committee oversees the CFTC, while the Senate Banking Committee oversees the SEC. This means that both committees must advance their respective bills before combining them into unified legislation for consideration on the Senate floor.
Competition or Collaboration
The draft does not compete with CLARITY but explicitly complements the House bill, according to Boozman’s official statement, which notes that the proposal “expands upon the CLARITY Act.”
The draft builds upon CLARITY’s digital commodity concept by adding the necessary infrastructure. CLARITY defines what a digital commodity is, while the Senate draft outlines how those markets must operate in practice.
The risk lies in the implementation details, as the draft includes bracketed sections that highlight unresolved issues where Democrats and Republicans disagree on provisions.
Booker expressed specific concerns about CFTC resources, preventing regulatory arbitrage, and ensuring sufficient guardrails against corruption, signaling that significant negotiation remains before final language emerges.
The draft could become a vehicle for modifying CLARITY provisions if lobbying targets DeFi treatment, developer liability, or stablecoin yield restrictions during the amendment process.
If changes drift too far from CLARITY’s original compromises, the complementary relationship could break down, leading to competing visions that stall both bills in committee.
The Senate Banking Committee must still advance its portion addressing SEC oversight, where multiple drafts exist with varying approaches.
Clean coordination between the Agriculture and Banking committees is essential to prevent bills from stalling each other due to jurisdictional conflicts or policy inconsistencies.
Crypto Council for Innovation CEO Ji Hun Kim called the draft “meaningful positive progress” that demonstrates momentum toward comprehensive market structure legislation.
The release signals that the Senate is building on CLARITY rather than rewriting it. However, the 155 pages of bracketed sections indicate that months of work remain before committee markup and floor votes.