Former House Financial Services Committee Chairman Patrick McHenry is warning that Rep. Maxine Waters’s leadership offers little hope for what he considers reasonable crypto market structure legislation, as Democrats prepare to take control of Congress.
Waters is set to take over the committee in January 2027 after Democrats won control of both chambers in the November 3, 2026 midterm elections.
McHenry questions “tough but fair” approach
In a recent interview, McHenry focused on Waters’s description of her regulatory goal as “tough but fair.” He rejected the second part of that phrase and framed the language as a signal that coming legislation could be harmful, particularly for crypto firms.
Waters has a record critics cite. In 2025, she introduced the Crypto Investor and Consumer Bill of Rights, a proposal centered on stronger consumer protections. An amendment she offered that same year included requirements for firms to provide monthly proof of reserves and for customers to be entitled to 24-hour withdrawals.
McHenry owns CLARITY Act misstep
McHenry also turned criticism on himself. On November 7, 2026, he said he made a mistake while shepherding the Digital Asset Market Clarity Act, known as the CLARITY Act, by splitting stablecoin rules from the broader market structure legislation.
He said the decision slowed the bill’s path to passage and took full ownership of the strategic error. According to his explanation, bundling stablecoins with market structure would have kept both issues moving as a single package. Separating them left the market structure piece to stand on its own, and it did not cross the finish line before the political ground shifted.
Anti-crypto bill seen as unlikely
Despite his warnings, McHenry is not predicting a crypto winter on Capitol Hill. On November 9, 2026, he said an anti-crypto bill would likely fail in the incoming Democratic House.
He pointed to the coalition around the industry and argued that bipartisan support for pro-crypto policy is stronger than it has ever been. In his view, there is enough cross-party collaboration to block legislation openly hostile to the sector.
Meanwhile, House Democrats are reportedly working on their own market structure framework. That effort is said to build on pieces of Waters’s earlier proposals, including the consumer-focused Bill of Rights, and may also try to balance oversight between the SEC and the CFTC.
