Senate Agriculture Committee Chair John Boozman on Jan. 21 released updated text for a crypto market structure bill and set a committee markup for Jan. 27.
The draft bill, titled the “Digital Commodity Intermediaries Act,” would give the Commodity Futures Trading Commission (CFTC) a defined framework to supervise parts of the spot crypto market when activity runs through brokers, dealers, exchanges and custodians.
The bill is the AC’s attempt to formalize what happens when something goes wrong. Crypto’s biggest retail pain points often show up as operational failures: account freezes, delayed withdrawals, outages during volatility, unclear complaint paths, and disputes over how platforms handle liquidations or restrict access.
Boozman’s text tries to turn those recurring issues into a regulatory feedback loop, while also answering the question lawmakers keep circling, whether the CFTC can afford and staff the job.
A watchdog with a mandate to turn outages into rule changes
One of the bill’s clearest retail-facing provisions sits inside Section 211, which establishes an “Office of the Digital Commodity Retail Advocate” within the CFTC. The text also defines who qualifies as a retail participant: someone who isn’t an eligible contract participant, who is active in a spot or cash digital commodity market, and who has completed a digital commodity transaction with a person or entity registered with the CFTC.
The retail advocate would report directly to the CFTC chair and be appointed from individuals with experience representing retail participants.
Unlike many market structure proposals that stop at broad mandates, this office comes with a list of duties that maps to how retail harm often emerges in practice.
The advocate would help retail participants resolve “significant problems” with the CFTC or with a registered futures association, track areas where retail participants would benefit from regulation or rule updates, and identify issues retail users face with CFTC-registered firms.
The office is also tasked with analyzing how proposed CFTC rules and registered futures association rules could affect retail participants, then recommending changes to both the Commission and Congress.
The practical value the bill would bring isn’t a new office that will magically stop freezes or outages, but the statute that creates an internal unit with instructions to collect evidence, look for patterns, and force those patterns into the rulemaking process.
If a recurring failure mode shows up across multiple registered venues, the advocate’s remit is built to translate that into regulatory edits rather than leaving it as background noise.
The bill also sets confidentiality limits that cut both ways. The advocate can access CFTC and registered futures association documents as needed, but nothing in the text authorizes the advocate or staff to access or disclose proprietary or sensitive market data, whether publicly or within the Commission.
The office must report to Congress twice a year, with an objectives report due by June 30 and an activities report due by Dec. 31. If funded and staffed, those reports could become a running scoreboard of which retail issues keep repeating at registered firms and what the CFTC is doing in response.
Boozman’s text also confronts the capacity critique head-on, and does it with numbers. It directs the CFTC to assess and collect fees from registered digital commodity brokers, dealers, exchanges, and qualified digital asset custodians, depositing those funds as offsetting collections to the CFTC’s appropriations account.
The Commission would set fee rates intended to match the annual appropriation for covered activities, and the bill states that fee rates are not subject to judicial review. To cover the gap before that fee machinery exists, the bill authorizes an upfront $150,000,000 appropriation “to remain available until expended” until the Commission establishes and begins collecting registration fees.
It also gives the CFTC chair authority to appoint individuals with “specialized knowledge” of the crypto industry without the usual competitive service constraints.
That language is doing real work: oversight in spot crypto would depend on understanding how market operations, custody plumbing, and risk controls behave when venues are stressed.
The execution risk here is straightforward. Even with money, supervision requires monitoring, investigative capacity, and operational readiness when a venue changes behavior fast.
A fee model can fund headcount, but it has to survive the political process, and a hiring waiver still depends on the agency moving quickly enough to build a team that can keep up with market structure that shifts in days, not years.
DeFi’s line in the sand: who can touch funds, and who can pull the lever
Retail users aren’t the only ones who should be concerned with the new draft of the bill. It could disproportionally affect builders and protocols as well, as it draws its DeFi boundary almost entirely through definitions rather than through blanket exemptions.
The text separates software that simply carries user instructions from systems where a person or coordinated group retains meaningful leverage over custody, execution, or rules.
A “decentralized finance messaging system” is defined as software that allows a user to create or submit an instruction to a DeFi trading protocol, paired with an exclusion that functions as a control test: the system cannot give anyone other than the user control over user funds or authority to execute the user’s transactions.
In plain terms, the statute pushes projects toward two questions: can anyone else touch the funds, and can anyone else pull the execution lever?
The definition of a DeFi trading protocol follows the same logic. It’s a blockchain-based system that executes transactions under predetermined automated rules, without relying on a person other than the user to maintain custody or control of assets involved.
The bill then narrows that scope through exclusions that pull a protocol back into regulatory reach if a person or coordinated group can control or materially alter functionality or rules, if operations are not based solely on transparent, pre-established code, or if a group has unilateral authority to restrict or censor access.
That framing shifts compliance conversations away from marketing labels and toward operational facts: admin keys, upgrade authority, governance concentration, and access controls.
It also sets up a future enforcement record that documents who had the power to change the system, who could stop users from using it, and who could move transactions from automatic to permissioned in practice.
The Senate Agriculture crypto bill is attempting two builds at once: a CFTC-centered regime for spot activity routed through intermediaries, and an internal structure meant to keep retail failures on the agenda through mandated reporting and rule review.
Whether it becomes more than a paper framework will turn on capacity and political alignment as the committee heads into the Jan. 27 markup and the parallel Senate Banking track continues to drift into late February or March.
