Full analysis of the U.S. crypto market structure draft: CFTC gains dominance, self-custody wallets granted exemptions

In early November 2025, the U.S. Senate Agriculture Committee announced a bipartisan draft of the “Clear Crypto Asset Market Act,” marking a significant breakthrough in the U.S. cryptocurrency regulatory framework. The draft explicitly grants regulatory authority over “digital commodities” to the Commodity Futures Trading Commission (CFTC), while the Securities and Exchange Commission (SEC) continues to oversee digital assets deemed securities, resolving longstanding jurisdictional disputes.

Key provisions include registration requirements for brokers, trading platforms, and custodians, as well as exemptions for open-source developers and self-custody wallets to provide monetary services, safeguarding individuals’ rights to hold and trade digital assets directly. Notably, the sections related to DeFi exemptions and privacy coin handling remain blank, indicating these complex issues still require further negotiation.

Crypto Regulatory Framework and Jurisdiction Division

This draft, jointly introduced by Senate Agriculture Committee Chair John Boozman (Republican-Arkansas) and senior member Cory Booker (Democrat-New Jersey), represents a bipartisan breakthrough in the coordination of digital asset regulation in the United States.

The draft amends the Commodity Exchange Act, providing a clear definition of “digital commodities”—blockchain-based, interchangeable assets capable of peer-to-peer transfer without intermediaries. This definition explicitly classifies Bitcoin as a digital commodity under CFTC jurisdiction, while tokens that meet the Howey Test are regulated by the SEC. Stablecoins, NFTs, and meme coins are excluded from this definition.

This delineation ends the long-standing jurisdictional dispute between the CFTC and SEC, offering much-needed regulatory certainty for the market. Boozman emphasized that the draft would “provide certainty for innovators and investors,” while Booker highlighted consumer protection measures. From an implementation perspective, the CFTC is required to finalize relevant rules within 18 months of the bill’s passage, with existing trading platforms granted a transition period to adapt to the new regulations.

Core Provisions and Market Impact Analysis

The draft has far-reaching and multi-layered implications for the crypto market structure, covering trading platform operations, customer asset protection, and the rights and obligations of market participants. According to the draft, all spot markets for digital commodities—including brokers, traders, exchanges, and custodians—must register with the CFTC and comply with anti-manipulation safeguards, customer fund segregation, cybersecurity protocols, and the appointment of a Chief Compliance Officer.

One of the most innovative provisions is the exemption for self-custody wallets and open-source developers—individuals will have the right to hold and trade digital assets directly without relying on intermediaries. This effectively recognizes the importance of self-sovereignty at the legal level. Amanda Tuminelli, Executive Director of the DeFi Education Fund, commented: “It’s encouraging to see progress in market structure and the bipartisan draft from the Senate Agriculture Committee. We hope the blank sections on DeFi can be filled with robust developer protections, clearly distinguishing between centralized intermediaries and software developers who do not control others’ funds.” This differentiated approach reflects lawmakers’ recognition of the unique nature of decentralized finance and could pave the way for compliant DeFi development.

Key Elements of the Crypto Market Structure Draft

• Regulatory Agencies: CFTC (Digital Commodities), SEC (Securities Tokens)
• Definition of Digital Commodities: Blockchain-based, interchangeable, peer-to-peer transferable assets
• Exclusions: Stablecoins, NFTs, meme coins
• Registration Requirements: Brokers, traders, exchanges, custodians register with CFTC
• Exemptions: Open-source developers, self-custody wallets
• Customer Protections: Fund segregation, anti-manipulation, cybersecurity, compliance officers
• Transition Period: Existing platforms have time to adapt
• Pending Issues: DeFi exemptions, blank sections on privacy coin handling

Bitcoin’s Status and Institutional Adoption Outlook

Adam Livingston, author of “The Harvest” and “The Bitcoin Era,” noted that the draft contains the “most pro-Bitcoin federal legal language,” officially defining Bitcoin as a digital commodity, aligning with the long-standing stance of the Bitcoin community. More significantly, the draft envisions the creation of fully CFTC-regulated spot Bitcoin exchanges, which would greatly enhance Wall Street firms’ trust in Bitcoin spot infrastructure.

Livingston emphasized, “This is the first time U.S. law explicitly recognizes Bitcoin’s sovereignty principles,” especially regarding protections for self-custody and peer-to-peer transactions, which will be key drivers for corporate treasury allocations of Bitcoin. From a capital flow perspective, he predicts that the bill’s passage could trigger trillions of dollars flowing into crypto through Bitcoin-backed loans, BTC treasury ladders, BTC money market products, and insurance-linked lending.

This institutionalization aligns with the pro-crypto stance of the Trump administration, making the bill a priority for the industry and political leaders, aiming to provide the regulatory clarity that digital asset executives and lobbyists have long sought.

Legislative Progress and Industry Response

Currently in the discussion phase, the final version still requires review and amendments by the Senate Agriculture and Banking Committees. Politically, if all Republican senators support the bill, at least 7 Democratic senators’ votes will be needed to avoid filibuster, giving Democrats significant influence in negotiations.

The crypto industry has responded positively to the draft’s progress. Jin Zhixun, CEO of the Crypto Innovation Council, stated, “The bipartisan draft discussed by the Senate Agriculture Committee marks meaningful progress toward establishing a comprehensive and purpose-built digital commodities market framework in the U.S.”

However, consumer advocacy groups warn that the traditional commodity regulatory approach of the CFTC may not effectively address the unique risks of the crypto market, such as algorithmic stablecoin collapses or cross-chain bridge hacks.

Looking ahead, the draft could enter formal legislative procedures in the first half of 2026, but complex issues like DeFi and privacy coins may delay overall progress. Investors should closely monitor these developments, as they will directly impact the legal status of decentralized protocols and privacy-enhancing technologies.

Conclusion

The unveiling of the U.S. crypto market structure draft marks a watershed moment in digital asset regulation. By clearly delineating jurisdiction between the CFTC and SEC, it provides unprecedented legal certainty for the industry. The exemptions for self-custody wallets and the legal recognition of Bitcoin lay the foundation for individual sovereignty, while pending provisions on DeFi and privacy coins hint at the next legislative battles. As the draft advances toward formal legislation, the U.S. may reassert its leadership in digital asset innovation and open the door for a new wave of institutional capital inflows.