CFTC Takes Regulatory Lead After Senate Crypto Bill Fails
The Commodity Futures Trading Commission (CFTC) has taken matters into its own hands after Congress failed to pass a crypto bill. On September 17, the CFTC filed two rulemakings, Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets, with the White House's Office of Information and Regulatory Affairs. This move came two days after the Senate fell short of the required 60 votes to advance the Digital Asset Market CLARITY Act, with a vote of 49 to 50.
CFTC Chair Michael Selig has directed his staff to use the agency's existing authority to establish a market structure for crypto assets. This includes creating a new designation called a crypto asset market, which would allow leveraged and margined crypto trading under CFTC oversight. Selig, the only sitting commissioner at the CFTC, is spearheading this effort without waiting for new legislation.
The collapse of the CLARITY Act was not solely about crypto but rather reflected broader political divisions. It was the second bipartisan crypto bill to fail in the Senate within nine months. The CFTC's decision to proceed independently highlights the agency's determination to regulate the crypto market, even as the process is expected to take well over a year.
The CFTC's actions are part of a broader strategy known as the Crypto Sprint, which involves recommendations from the Trump administration's Working Group on Digital Asset Markets. Several exchanges, including Bitnomial, Kraken, CME Group, Cboe, ICE, and Coinbase, are already in talks with the CFTC about listing spot or leveraged crypto products. The jurisdictional fight with the SEC remains unresolved, as the SEC has not fully ceded spot market authority to the CFTC by statute.
The CFTC's rulemaking is still in its early stages, with multiple rounds of interagency review and public comment ahead. Industry experts expect final rules to take effect by late 2027. Despite the slow process, the CFTC's move signals a shift in the regulatory landscape, focusing attention on the White House's Office of Information and Regulatory Affairs rather than Congress.