Cryptocurrency Legislation Sprint: Tuesday Hearing Could Be a Watershed Moment as Bipartisan Amendments Emerge

The legislative process for the US crypto market structure enters a critical stage. According to the latest news, the Senate Agriculture Committee will hold a hearing on January 27th (this Tuesday) to discuss the draft amendment of the “Digital Commodity Intermediary Act.” This draft, released by Republicans, mainly focuses on regulating the spot crypto market, with the core being the granting of exclusive regulatory authority to the U.S. Commodity Futures Trading Commission (CFTC) over trading platforms, traders, and brokers. Bipartisan lawmakers may propose amendments during the hearing, which will directly influence the final form of the bill.

Preliminary Framework of the Bill Takes Shape

The discussion draft from the Senate Agriculture Committee establishes a CFTC-centered regulatory framework for digital commodity spot markets. This draft is expected to be merged in the future with related legislation completed by the Senate Banking Committee, ultimately forming a comprehensive “Cryptocurrency Market Structure Act.”

Division of Regulatory Authority

According to the draft, the CFTC will gain exclusive regulatory authority over the spot crypto market, specifically including:

• Regulation of crypto trading platforms
• Regulation of traders and brokers
• Norms for spot market trading activities

This means that crypto spot trading will fall under the CFTC’s regulatory scope rather than being entirely led by the Securities and Exchange Commission (SEC). This division reflects the functional separation between the two regulators: CFTC responsible for commodities, SEC responsible for securities.

Why the CFTC?

The Senate Agriculture Committee itself is responsible for overseeing the CFTC, so this draft naturally focuses on regulation related to the commodity nature of digital assets. Compared to securities (discussed by the Senate Banking Committee), commodity attributes are generally considered less controversial and politically sensitive.

Divergence in Bipartisan Attitudes

While the draft largely aligns with market expectations, it still bears clear partisan characteristics. According to sources, the draft has not yet received formal endorsement from key Democratic negotiators, although it incorporates many provisions previously negotiated with Democrats.

Possible Directions for Amendments

The hearing on January 27th will be an important opportunity for bipartisan lawmakers to propose amendments. While specific amendments have not yet been announced, based on historical experience, potential points of disagreement include:

• The precise boundaries of regulatory authority
• Exemptions for small traders
• The strength of consumer protection measures
• Regulatory approaches for cross-border transactions

Market Is Already Adjusting to New Expectations

Interestingly, market participants seem to be preparing for this regulatory framework. Recent reports indicate that crypto industry executive Arthur Hayes recently deposited $18 million USDC into Galaxy Digital, and over the past three weeks, a total of $54.5 million has been deposited into FalconX and Galaxy Digital. This may reflect increased market confidence in compliant, institutional-grade platforms.

Additionally, on-chain IPO platform Superstate recently completed an $82.5 million Series B funding round, with investors including Galaxy Digital and other professional crypto investors, demonstrating ongoing support for regulated financial innovation.

Future Outlook

From the timeline, this hearing is a key milestone in the legislative process. The proposal of bipartisan amendments may extend the discussion period but could also lead to consensus on the commodity attribute section. It is expected that after the Banking Committee completes discussions on related topics, the bill will move into a joint stage of both committees.

The pace of legislative progress depends on the extent of bipartisan disagreements. If disputes over the commodity attribute are indeed minor, this part may advance relatively quickly, while progress on the securities attribute section (discussed by the Banking Committee) might face more divergence.

Summary

The crypto market structure legislation has entered its most visible phase. The hearing on Tuesday will serve as an important window for observation, with bipartisan proposed amendments directly impacting the final shape of the bill. Currently, the regulatory framework for the commodity attribute is largely formed, and CFTC’s authority over the spot market has become a consensus. Market participants are already adapting to these new regulatory expectations, with increased focus on compliant and institutional platforms. Moving forward, attention should be paid to specific partisan disagreements on amendments and the progress of the Securities attribute section by the Banking Committee.