CFTC prepares crypto rules as Clarity Act stalls

Commodity Futures Trading Commission Chairman Michael S. Selig has instructed agency staff to prepare a regulatory framework for cryptocurrency markets that could be advanced if Congress fails to enact the Clarity Act, signalling that the regulator will not allow the legislative impasse to leave digital assets without clearer rules.

Selig outlined the approach on Thursday as the CFTC convened the inaugural meeting of its Innovation Advisory Committee in Washington, where cryptocurrency regulation, artificial intelligence and prediction markets dominated the agenda. He said comprehensive legislation remained the preferred route but indicated that the commission was ready to use its existing statutory powers if congressional negotiations remained stalled.

“It’s really important that we have market structure,” Selig said in remarks surrounding the meeting. “We can do that through rules, we can do that through laws.”

The chairman has directed CFTC staff to examine how a crypto market structure regime could be established under the Commodity Exchange Act. The work could eventually lead to formal rule proposals covering trading venues, leveraged cryptocurrency transactions and parts of decentralised finance that fall within the regulator’s jurisdiction.

The initiative increases pressure on lawmakers to resolve disagreements surrounding the Digital Asset Market Clarity Act. The legislation is designed to establish a broader division of responsibilities between the CFTC and the Securities and Exchange Commission and provide statutory rules for trading and issuing digital assets.

The House of Representatives passed the Clarity Act in July 2025 by 294 votes to 134. Progress in the Senate has proved substantially more difficult, with lawmakers divided over investor protections, conflicts of interest, banking provisions and the regulatory treatment of different categories of cryptocurrency activity.

President Donald Trump this week urged Congress to pass what he described as a fair version of the legislation during a White House gathering involving cryptocurrency executives and financial regulators. Senate action is expected to resume after the August recess, although the legislation faces a narrow timetable before the November midterm elections.

Selig’s intervention gives the industry a potential alternative path if lawmakers cannot reach agreement. Agency rulemaking, however, would not provide the same permanence or breadth as legislation enacted by Congress. Regulations introduced under existing laws can also face court challenges and could be modified by a future administration.

That distinction remains important for cryptocurrency companies seeking long-term certainty over whether digital assets are securities, commodities or fall into other regulatory categories. The classification determines which regulator has jurisdiction and what registration, disclosure, trading and customer-protection requirements apply.

The CFTC has traditionally overseen derivatives markets, including futures and swaps, while exercising anti-fraud and anti-manipulation authority over commodity spot markets. Congress would need to grant additional authority if policymakers want the agency to supervise large sections of cryptocurrency spot trading through a comprehensive federal regime.

Selig’s tenure has nevertheless brought a broader effort to adapt the regulator’s existing powers to digital markets. He became the CFTC’s 16th chairman in December 2025 after previously serving as chief counsel to the SEC’s Crypto Task Force and as a senior adviser to SEC Chairman Paul S. Atkins.

The CFTC and SEC signed a memorandum of understanding in March aimed at improving coordination between the two agencies. Their programme includes harmonising product definitions, modernising clearing and collateral rules, reducing regulatory duplication and developing a framework for crypto assets and other emerging technologies.

Days later, the regulators jointly clarified how federal securities laws apply to several forms of crypto activity. The interpretation established categories including digital commodities, digital collectibles, digital tools, stablecoins and digital securities, while addressing activities such as staking, mining, airdrops and token wrapping.

The CFTC has also moved to accommodate cryptocurrency derivatives. It permitted a CFTC-regulated exchange to list a bitcoin perpetual contract in May, bringing a product widely traded on offshore platforms into the regulated U. S. derivatives market.

Selig’s Innovation Advisory Committee brings together executives and specialists from cryptocurrency, exchanges, clearing houses and technology companies. Members include Coinbase chief executive Brian Armstrong, Uniswap Labs chief executive Hayden Adams, BitGo co-founder Mike Belshe, Polymarket chief executive Shayne Coplan and representatives from Cboe Global Markets and the Options Clearing Corporation.

Arabian Post – Crypto News Network