CFTC Takes Regulatory Path Without Congress

The Commodity Futures Trading Commission (CFTC) is taking steps to establish a regulatory framework for crypto-asset markets using its existing authority. CFTC Chairman Michael S. Selig directed staff on August 20 to explore rules that would create a new 'crypto asset market' designation, a type of designated contract market under CFTC rules.

This approach could allow current registrants and nonregistered crypto exchanges to receive the new designation, potentially offering leveraged or margined trading under the agency's oversight. The move comes after the Senate failed to advance the Digital Asset Market CLARITY Act, which was intended to establish statutory market-structure rules and define the CFTC's and Securities and Exchange Commission's roles.