CFTC Sends Crypto Proposal to White House After CLARITY Bill Fails

The Commodity Futures Trading Commission (CFTC) has sent a proposal for regulating crypto markets to the White House, following the failure of the CLARITY bill in the Senate. The draft rulemaking, titled 'Blockchain and Digital Assets,' aims to create a regulated route for leveraged trading and would utilize the CFTC's existing authorities.

CFTC Chair Michael Selig had previously hinted at this plan, stating that staff would explore crypto market rules using powers already held by the agency. The proposal may cover requirements for CFTC-regulated venues, registration categories for eligible exchanges, and rules based on the CFTC's current mandate.

However, the proposed rule cannot give the CFTC general authority over non-security spot exchanges or settle the legal status of every token. It also raises questions about how to regulate onchain protocols, which may divide their responsibilities among different participants.