US Senate Pushes Major Reforms to Cryptocurrency Market Structure and Trading Oversight

The latest push to regulate digital assets reveals a deeper concern among lawmakers: ensuring that government officials adhere to the same market structure rules as ordinary citizens. On January 24, Democratic senators introduced proposed amendments ahead of next week’s Senate Agriculture Committee hearings on the comprehensive cryptocurrency market structure bill, signaling a potential turning point in how the US oversees digital asset trading.

Digital Asset Ethics Act Restricts Government Officials’ Trading Activities

At the core of these proposed changes is the “Digital Asset Ethics Act,” which would impose strict limitations on trading in digital assets by “regulated personnel”—a category encompassing the president, vice president, members of Congress, and other federal officials. This amendment reflects growing concerns about conflicts of interest. According to Bloomberg’s analysis, former President Trump has accumulated approximately $1.4 billion in profits from cryptocurrency investments, with significant exposure to the DeFi and stablecoin initiative World Liberty Financial. The Trump family also maintains a 20% ownership stake in the mining company American Bitcoin, underscoring the stakes involved in establishing clear market structure guardrails.

Broader Regulatory Measures Target Market Vulnerabilities

Beyond ethics reforms, the proposed amendments address two additional market structure vulnerabilities. First, lawmakers are seeking protections against fraudulent trading schemes that exploit “digital asset self-service terminals,” closing gaps that current market structure frameworks have overlooked. Second, and notably, the amendments would require that any future cryptocurrency legislation not take effect until at least four commissioners of the Commodity Futures Trading Commission (CFTC) are appointed.

CFTC Staffing Crisis Hampers Market Structure Implementation

This final provision highlights a critical constraint on cryptocurrency market structure regulation. The CFTC currently operates with only one commissioner, despite having a maximum capacity of five. This staffing deficit represents a fundamental challenge to effective market structure oversight, as commissioners are essential for voting on regulatory initiatives. Until this organizational gap is addressed, comprehensive cryptocurrency trading regulations face significant implementation hurdles, leaving the market structure framework incomplete and vulnerable to continued volatility and manipulation.