CFTC to Regulate Crypto Under Existing Authority After CLARITY Act Fails

The Commodity Futures Trading Commission (CFTC) has announced plans to move forward with regulating the cryptocurrency market using its existing authority, following the Senate's rejection of the CLARITY Act. The bill, which would have established a clear distinction between digital commodities and securities, was blocked by a 49-50 vote on September 16.

CFTC Chairman Michael Selig stated that Americans deserve 'regulatory clarity, legal certainty, and consumer protections in crypto markets.' He emphasized the agency's readiness to issue rules for the 'new frontier of finance,' citing months of preparatory work at the CFTC. The agency has been exploring market-structure rules under existing statutory authority since an August 20 Innovation Advisory Committee meeting.

The Senate's rejection does not repeal the CLARITY Act, but rather prevents further action on the bill. Without comprehensive legislation, federal agencies will continue to enforce regulations on a case-by-case basis, primarily through SEC and CFTC actions.