Senate market structure bill draft proposes SEC–CFTC joint committee to end crypto turf wars

"By working together to align our regulatory frameworks, the SEC and CFTC can reduce unnecessary barriers, enhance market efficiency, and create space for innovation to thrive. Our shared goal is to ensure that America remains the global leader in capital markets," SEC Chairman Paul S. Atkins and CFTC Acting Chairman Caroline D. Pham said in a statement . 

New rules for DeFi developers, DePIN tokens, and airdrops

Also included in the latest version of the bill is explicit protection for DeFi developers contributing to decentralized protocols. Under the draft bill, running a decentralized exchange (DEX) or automated protocol would not automatically subject the developers or users to the full raft of broker-dealer or anti-money-laundering regulations that apply to traditional financial institutions. 

While a preliminary version of the protections appeared in an earlier bill draft, the new draft explicitly lays out protections for DeFi users who run validator nodes, contribute to liquidity pools, develop messaging protocols, build wallets or key-management systems, and more. The protections would not apply to protocols that can be materially altered by a single actor or group, i.e., centralized protocols. 

The changes to the bill come shortly after Tornado Cash co-founder Roman Storm was found guilty by a New York jury of operating an unlicensed money transmitting business in early August. The jury could not reach a verdict for money laundering and sanctions evasion charges. Many crypto industry insiders decried the ruling, calling it a threat to DeFi developers' rights. 

The draft also clarifies regulatory treatment of "gratuitous distributions," or staking rewards, liquid-staking outputs, programmatic distributions, and holder airdrops, which would not constitute an "offer or sale" under securities laws. The change responds to industry concerns that everyday crypto activities, such as claiming an airdrop, could trigger securities laws. 

The latest draft also adds an entirely new section exempting Decentralized Physical Infrastructure Networks (DePINs) from securities laws. Under the bill, tokens powering DePINs will not be treated as securities offerings so long as they meet the decentralization criteria laid out by the bill. If any person or entity effectively owns more than 20% of the tokens for any particular DePIN, the safe harbor exemption would not apply.

Finally, the draft bill includes language that clarifies the treatment of tokenized securities and real-world assets, noting that non-security assets don't automatically become securities when brought onchain. The bill calls on the SEC and CFTC to jointly study the regulatory treatment of tokenized RWAs, including standards for verification, custody, audit, and reporting; criteria for qualified third-party custodians; how to address fraud; and how federal, state, and international regimes should fit together, plus coordination and enforcement mechanics. 

Pro-crypto Senator Cynthia Lummis (R-WY) told CNBC that the Senate Banking Committee wants a final version of the bill on President Trump's desk by the end of the year. The Senate's version will have to be reconciled with the Clarity Act bill passed by the US House in July .