Years after U.S. Senators have debated which entity will oversee cryptocurrency regulation in the U.S., the Senate Agriculture Committee has introduced an initial draft bill that is likely to resolve the regulatory agency dispute. The proposed legislation, developed by Chairman John Boozman (R-Arkansas) and Senator Cory Booker (D-New Jersey), would assign the majority of oversight authority over the cryptocurrency space to the Commodity Futures Trading Commission (CFTC). This is a major departure from the Securities & Exchange Commission’s (SEC) approach to enforcing regulations on the cryptocurrency markets.
While the proposed legislation marks a significant step forward in developing clear regulations for the growing sector, it is far from finalized, as it is expected to be vetted by Congress, with many provisions still under negotiation among lawmakers. The draft bill contains brackets indicating areas where no agreement has been reached among members, highlighting both the development of legislation and future legislative hurdles.
The Battle Over Crypto Jurisdiction
Crypto jurisdiction is a battle that has been waged for almost a decade. The CFTC’s claims of jurisdiction began in 2015 when they said that Bitcoin and all other virtual currencies are commodities. In 2017, the SEC filed its own jurisdictional claims, stating that most cryptocurrency-related activity falls under securities law.
The dual-agency approach was creating significant confusion for many companies attempting to comply with regulations. The SEC, under former Chair Gary Gensler, took a very aggressive enforcement position that most cryptocurrencies would be classified as securities. The CFTC, led by Rostin Behnam, has taken the opposite approach with less fanfare by classifying assets such as Ethereum and stablecoins as commodities.
What the New Bill Proposes
The draft legislation defines key terms, such as “blockchain,” and establishes how these concepts apply under the Commodity Exchange Act. It treats most digital tokens as commodities rather than securities, a stance crypto firms have long sought.
The bill requires certain companies to register with the CFTC and sets up disclosure requirements and transaction fees. It also directs the CFTC and SEC to work together on rules covering everything from portfolio margining to oversight of intermediaries. Understanding these regulatory changes is crucial for anyone securing digital assets through crypto wallets or Bitcoin wallets, whether using hardware ones for cold storage or software solutions for quick daily transactions. Self-custody options, where users control their private keys, may face different regulatory treatment than custodial services, which could affect how you choose between the best crypto wallets and custody solutions going forward.
One unresolved section addresses whether the Agriculture Committee has enough authority to tackle certain legal issues. Democrats noted they want to work with the Banking Committee to resolve this. Another bracketed part would require at least two CFTC commissioners to be chosen with input from the minority party. Right now, the agency has only an acting chair, Caroline Pham, though President Trump has nominated Mike Selig for the permanent position.
Support From the Industry
Industry leaders have greeted this proposal with optimism and said that it represents a first, positive step toward developing an acceptable regulatory model. Amanda Tuminelli of the DeFi Education Fund believes the proposed legislation will protect DeFi developers and differentiate them from central exchanges that hold customers’ funds.
The industry has argued for some time that the SEC’s regulatory actions are limiting and causing companies to go offshore. This is why many believe the CFTC is a better choice to regulate the space, due to its experience in commodity markets and its more amiable approach.
Political Obstacles Make Things Difficult
The next step in passing this bill won’t be easy at all, as there’s still much work to do. The agriculture and banking committees will each have to send their own versions of the bill to Congress before sending the two together to the House for a final vote. However, there are already Republican disagreements within the Banking Committee about whether the bill is ready to move forward. Specifically, Senator John Kennedy stated he had serious reservations about moving the bill forward.
Also, Democrats are divided. Many Democrats want to make headway with Republicans to pass a bill. Still, Senator Elizabeth Warren continues to oppose the crypto industry and its potential risks to consumers, as well as President Trump’s personal connections to it.
The timeline for passing the bill continues to shift. Initial estimates were to pass the bill in August, then September, and finally November, but now we’re hearing it may not be passed until late 2025, or possibly even early 2026. Ron Hammond from Wintermute stated that while either or both committees may vote on their respective versions of the bill by year’s end, combining the two bills and working out the various political disagreements will take longer than expected.
The Broader Context
The Senate’s work follows the House of Representatives’ passing its own crypto bill, the CLARITY Act, in July. That legislation also sought to clarify the line between CFTC and SEC authority. The House’s success put pressure on the Senate to act.
President Trump has made crypto regulation a priority, and his administration’s support could help advance the legislation. However, concerns remain about whether the CFTC has enough staff and resources to handle the responsibility.
The proposal reflects what some call the Ripple Consensus, as outlined in a court ruling in the SEC’s case against Ripple Labs. Judge Analisa Torres determined that XRP itself wasn’t a security, but Ripple’s initial sales to institutions counted as an unregistered securities offering. Lawmakers from both parties accept this framework as a starting point.
Final Thoughts
The Senate Agriculture Committee’s draft bill represents real progress in the long effort to create clear crypto regulations. After nearly a decade of confusion about whether the CFTC or SEC should oversee digital assets, the proposal to give the CFTC primary authority reflects broad agreement that the current system isn’t working.
However, significant hurdles remain. Unresolved questions about decentralized finance, disagreements within both parties, and the complex process of combining committee bills could delay passage well into 2026. Still, the momentum behind this legislation suggests that some form of market structure bill will eventually become law. The question now is not if Congress will act, but when and in what final form.
