House Republicans Release Draft Bill to Regulate the Crypto Industry

Highlights:

• Lawmakers introduce a draft proposal for a unified crypto regulatory framework in the U.S.
• The bill clarifies SEC and CFTC roles, providing legal definitions for key crypto terms.
• The draft includes regulations for digital exchanges, protecting DeFi protocols, and self-custody.

On May 5, top lawmakers from the House Financial Services and Agriculture Committees introduced a draft proposal to create a unified crypto regulatory framework in the US. House Financial Services Chairman French Hill (R-AR), Agriculture Committee Chairman Glenn “G.T.”, Agriculture Subcommittee Chair on Commodity Markets Dusty Johnson (R-SD), Thompson (R-PA), Financial Services Subcommittee Chair on Digital Assets Bryan Steil (R-WI) released the draft legislation.  

New Bill Clarifies SEC and CFTC Roles and Defines Crypto Key Terms

Lawmakers have highlighted that the new bill aims to clarify the roles of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in overseeing digital assets. Additionally, the bill introduces legal definitions for key terms in blockchain and crypto markets, providing greater regulatory clarity.

Chairman Hill stated:

“We made historic progress in the 118th Congress to build bipartisan, bicameral consensus in crafting a functional regulatory framework for digital assets. Our discussion draft builds upon that work and provides much-needed regulatory clarity for the digital asset ecosystem by protecting consumers and safeguarding the long-term integrity of digital asset markets in the United States.”

He also mentioned that the committee plans to include public feedback and collaborate with the Trump administration to finalize the bill for approval. The bill defines key terms like digital commodity, blockchain system, and stablecoin. It also says that rewards from mining, staking, or user rewards are not considered securities or sales. Chairman Thompson stressed the need for clear laws, saying the bill will fill gaps and give developers and users more certainty.

As promised, here’s my analysis on the new joint House Financial Services and House Agriculture Market Structure bill on crypto. This is the bill that will, finally, provide a clear regulatory regime on crypto that many have been calling for.

Thread. https://t.co/6ZF0FkT8nH

— Justin Slaughter (@JBSDC) May 5, 2025

New Draft Regulates Digital Commodity Exchanges and Protects DeFi Protocols

The draft introduces regulations for digital commodity exchanges, brokers, and dealers under the CFTC, while the SEC retains authority over securities and hybrid assets. Entities involved in custody, trading, or interacting with customers must comply with new registration and disclosure requirements.

Subcommittee Chair Steil described the draft as the start of a “golden age” for digital assets, with the House leading the way in shaping future regulations. The draft also protects DeFi protocols and self-custody. DeFi platforms are exempt from traditional financial rules if they don’t control user funds.

The House hearing on Tuesday is expected to be a key step. The event will be organized by two subcommittees: the Agriculture Subcommittee on Commodity Markets and the Financial Services Subcommittee on Commodity Exchanges.

Lawmakers will likely question experts and industry leaders about the bill’s impact on digital markets. Crypto industry participants are excited about the potential regulatory framework. Some see it as a great first step, but others warn of possible loopholes. Supporters believe it could help the U.S. stay competitive, as countries like the U.K. and E.U. already have clear crypto rules. The U.S. is lagging behind.