Patrick McHenry spent years working to create a rulebook for crypto. Now he warns that the next person to hold the pen could write something very different.
The former chair of the House Financial Services Committee says Rep. Maxine Waters’s leadership offers little hope for reasonable crypto market structure legislation. Waters is expected to take over the committee in January 2027, after Democrats won control of both chambers in the November 3, 2026 midterm elections.
McHenry reads the tea leaves
In a recent interview, McHenry focused on Waters’s stated approach to regulation. She has described her goal as “tough but fair” rules.
McHenry is unconvinced by the second half of that phrase. He portrayed the wording as a warning that the forthcoming legislation could be harmful, particularly to crypto firms.
Waters has a record her critics can point to. In 2025, she introduced the Crypto Investor and Consumer Bill of Rights, a proposal focused on stronger consumer protections.
An amendment she proposed that year included two notable requirements: firms would have to provide monthly proof of reserves, and customers would be entitled to 24-hour withdrawals.
A mea culpa on the CLARITY Act
McHenry did not spend the entire conversation blaming the other side of the aisle. On November 7, 2026, he also turned the focus on himself.
The former chair acknowledged a mistake he made while guiding the Digital Asset Market Clarity Act, commonly known as the CLARITY Act, through the process. He chose to separate stablecoin rules from the broader market structure legislation.
He now says that decision slowed the bill’s progress toward passage, and he accepted full responsibility for the strategic error.
The reason for his regret is fairly straightforward. Bundling stablecoins with market structure could have kept both issues advancing as one package. Separating them left the market structure measure to proceed alone, and it did not pass before the political landscape shifted.
Not all doom and gloom
Despite his warnings, McHenry is not forecasting 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 based that view on the coalition that has formed around the industry. McHenry said bipartisan support for pro-crypto policy is stronger than ever.
In his view, enough cooperation across party lines exists to block legislation openly hostile to the sector.
Meanwhile, House Democrats are reportedly developing their own market structure framework. The effort is said to draw on elements of Waters’s earlier proposals, including the consumer-focused Bill of Rights.
The new framework may also seek to balance oversight between the SEC and the CFTC.
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