The chair of the Commodity Futures Trading Commission (CFTC) stated Thursday that the agency will move to establish new rules for the cryptocurrency market if Congress does not pass pending legislation this year. Michael Selig told an audience of cryptocurrency and prediction market executives that while the agency prefers to implement the proposed Clarity Act, it is prepared to use its existing regulatory authority to create a market framework if the bill remains stalled in the Senate.
The Clarity Act is a legislative proposal intended to divide oversight of the digital asset industry between two federal regulators: the CFTC, which oversees commodity futures and options markets, and the Securities and Exchange Commission (SEC), which oversees securities. Senate Republicans and some Democrats have negotiated the bill for nearly a year, but progress has slowed due to disagreements regarding ethics restrictions and other provisions.
Selig reported on Tuesday that he has already instructed CFTC staff to begin exploring how to codify a market structure using current authorities. Under this proposed administrative plan, the CFTC would designate specific crypto exchanges as "crypto asset markets" and permit them to offer trading. The agency is also researching legal methods for developers to offer their protocols in a compliant manner.
For the industry, this means exchanges would have to seek official CFTC designations to operate legally, a process that would likely involve new compliance costs and reporting requirements for businesses. Individual investors would notice changes in the legal status of the platforms they use and the specific protocols available for trade. Selig indicated this shift would occur if the legislative process does not produce a bipartisan product for the president to sign.
The move could set a precedent for how federal agencies exercise existing powers when legislative efforts reach an impasse. A shift to agency-led rulemaking could also influence how the SEC approaches its own oversight of the sector. While Selig said he is giving the Clarity Act "breathing room" for a potential vote, he stated the agency is ready to begin its own rulemaking process immediately if the bill does not advance. Senate Republican leaders recently postponed a vote on the bill until mid-September.