CFTC Unveils Cryptocurrency Rule Proposal After Senate Fails to Pass Clarity Act

The Commodity Futures Trading Commission (CFTC) has submitted a new rulemaking initiative to the White House for review, moving ahead with an agency-led framework in crypto market regulation. The filing, titled 'Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,' is listed as a prerule action and remains pending review.

The CFTC's submission comes just two days after the Senate failed to advance the Digital Asset Market Clarity Act, which would have established a statutory framework for dividing digital assets between securities and commodities regulation. The act's rejection has shifted more of the regulatory work to the agencies, where the SEC and CFTC are now using existing powers to build pieces of a market structure.

The CFTC filing does not confirm that the final proposal will adopt a specific structure, but it shows that the agency's work has moved beyond public speeches and internal policy discussions into the federal regulatory review process. The distinction is important for exchanges and trading firms, as congressional law can explicitly expand or redefine the CFTC's jurisdiction, while agency rulemaking must remain within powers the regulator believes it already has.

CFTC Chair Michael Selig had previously directed agency staff to explore how the CFTC could use its existing statutory powers to establish rules for crypto asset markets if Congress failed to act. The OIRA submission does not contain detailed regulatory text, but it suggests that the agency is testing how much of the gap left by the Senate's rejection of the Clarity Act it can fill without new legislation.

The CFTC's actions are part of a broader burst of agency activity following the Senate vote. On September 17, the SEC issued its long-awaited 'Innovation Exemption,' giving qualifying Tokenized Securities Venues temporary and conditional relief from the definition of an exchange. The CFTC separately issued a no-action position covering providers of passive trading software.