CFTC Chair Selig Vows Agency-Led Crypto Rules After Senate Blocks CLARITY Act

<a href="https://www.google.com/preferences/source?q=finance.biggo.com" rel="nofollow noopener” target=”_blank”>Add preferred source
CFTC Chairman Michael Selig said the agency will advance crypto market-structure rules using existing statutory authority after the Senate blocked the CLARITY Act on a 49-50 cloture vote, 11 short of the 60 required. The failed procedural vote on Sept. 15 shifted regulatory momentum toward the CFTC and SEC, which have both signaled they will proceed with rulemaking without waiting for Congress. The SEC’s proposed Regulation Crypto Assets offers fundraising exemptions of up to $5 million for startups and $75 million annually for qualifying projects, with public comments due Oct. 20. Agency authority remains limited, however: the CFTC can regulate derivatives and leveraged transactions but lacks comprehensive power over spot digital-commodity exchanges, which would require new legislation. Industry experts expect institutional adoption to slow and some companies to build with a global footprint, while Bitcoin remains more insulated than altcoins and DeFi platforms from the resulting regulatory uncertainty.

Key Elements

The Commodity Futures Trading Commission will press forward with crypto market-structure rules using its existing legal authority after the U.S. Senate blocked the CLARITY Act, the agency’s chairman said, signaling that federal regulators rather than Congress will now define the near-term operating boundaries for digital asset firms in the United States.

CFTC Chairman Michael Selig said on Sept. 16 that Americans “deserved regulatory clarity, legal certainty, and consumer protections in crypto markets” and that his agency was ready to issue rules for what he called the “new frontier of finance.” The statement came one day after the Senate rejected a cloture motion on H.R. 3633, the Digital Asset Market Clarity Act of 2025, by a 49-50 vote — 11 short of the 60 votes required to open debate.

Selig’s move to accelerate agency rulemaking follows months of preparatory work at the CFTC. During an Aug. 20 Innovation Advisory Committee meeting, he said staff was already exploring market-structure rules under existing statutory authority. The agency also formed an Innovation Task Force on March 24, covering crypto assets, blockchain technologies, artificial intelligence and prediction markets, and has been coordinating with the SEC’s Crypto Task Force on related initiatives.

The two agencies issued joint crypto guidance in March, explaining how federal securities laws apply to certain crypto assets and transactions. But that guidance, and the rulemaking now underway, cannot replicate the broader jurisdictional framework that Congress had proposed in the CLARITY Act.

The Senate’s action did not repeal H.R. 3633 or enact an alternative framework. It rejected cloture on the motion to proceed, preventing the chamber from moving forward under that procedural request. The bill, which the House passed 294-134 on July 17, 2025, would have established a statutory definition distinguishing digital commodities from securities and clarified the respective jurisdictions of the CFTC and the SEC.

Without such a law, no federal statute defines which digital assets are commodities versus securities. Enforcement continues to proceed case by case, primarily through SEC and CFTC actions, rather than through a rules-based framework that market participants can plan around.

The legislative setback marks the latest in a series of near-misses on crypto market structure. Earlier this year, the Senate similarly failed to advance the GENIUS Act, which targeted stablecoin regulation. Both failures underscore how contested the path to comprehensive federal crypto legislation has become.

The SEC has also signaled it will proceed without waiting for Congress. SEC Chair Paul Atkins said after the vote that the agency would act “with or without legislation” and remain within its statutory authority.

The SEC’s clearest route concerns activities covered by federal securities law. Its proposed Regulation Crypto Assets, published Aug. 18, would create tailored exemptions for certain projects raising capital through crypto assets. A startup exemption would cover qualifying offerings of up to $5 million over four years, while a separate fundraising exemption would allow qualifying projects to raise as much as $75 million annually, subject to disclosure and other conditions.

The proposal also includes a conditional safe harbor for projects that sell an asset while promising to build a network, product or service. If the issuer later completes those promised managerial efforts and meets the SEC’s conditions, the asset could cease to be treated as part of the original investment contract. The public comment period for the proposal closes Oct. 20.

Atkins has also asked SEC staff to develop rules for crypto custody by investment advisers and regulated funds, and a separate transfer-agent proposal would update how ownership records for tokenized securities are maintained. The custody framework remains less advanced; Atkins has instructed staff to prepare it, but the complete proposal has not been published.

The CFTC’s clearest route runs through leverage. The agency oversees commodity derivatives such as futures and swaps, along with certain retail commodity transactions involving margin, leverage or financing. Selig has directed staff to examine whether existing firms and crypto exchanges could operate as a type of designated contract market under tailored CFTC rules, subject to federal registration, surveillance and customer-protection requirements.

Ordinary spot trading presents a larger problem. Buying a crypto asset with cash and taking delivery is not the same as trading a futures contract or opening a leveraged position. The CFTC can pursue fraud and manipulation involving spot commodity markets, but it lacks the comprehensive authority to register and supervise conventional spot digital-commodity platforms that the CLARITY Act would have provided.

Note: Agency rulemaking is bounded by authority already delegated under existing statutes. Future agency leadership could revise rules, and businesses or industry groups could challenge them in court if a regulator is seen to have exceeded its statutory powers.

Market participants largely expect the regulatory focus to shift from lawmakers to federal agencies. Sid Powell, CEO and co-founder of Maple Finance, said the SEC and CFTC “can do a great deal within existing law, through rulemaking and guidance, and that is where the perimeter actually gets drawn over the next year.” He expects comprehensive legislation to return in the next Congress.

Gabor Gurbacs, founder and CEO of OpenAssets, offered a similar assessment, saying “the vote may have stalled. Regulatory work has not.” He favors industry-led standards over broad top-down requirements, arguing that large regulatory bodies can produce rules that move more slowly than the technology.

Former CFTC Chairman J. Christopher Giancarlo also said after the vote that the two agencies could continue developing digital asset frameworks under existing law.

The experts broadly rejected the idea that the failed vote would stop crypto development. Several said it could instead affect where companies hire employees, seek licenses, raise capital and launch products. Kyle Sonlin, president and co-founder of Global Settlement Network, said he expects more companies to “build with a global footprint from the start and keep jurisdictions with clearer rules firmly in the mix.”

Courtney Olujobi, principal at Moon Pursuit Capital, described uncertainty as a cost that appears before a company faces a formal legal bill. It can influence whether an early hire is an engineer or compliance specialist, whether a product launches in the United States, and whether founders first approach American or overseas investors.

Institutional Impact and Market Outlook

The lack of legislation may have a larger effect on institutions that require stable compliance standards before committing capital or building products. Raj Kamal, CEO and founder of TransFi, expects the setback to slow institutional adoption in the United States and other markets that take cues from American regulation. He sees a risk that more activity will move to jurisdictions such as the United Arab Emirates and Singapore.

Jeff Ko, chief analyst atld Bitcoin through regulated exchange-traded funds and the next group considering broader crypto services. He expects banks exploring custody and trading, asset managers developing multi-token products and companies studying tokenization to move more slowly rather than leave the market entirely

Bitcoin remains more insulated than altcoins and DeFi platforms, according to several analysts. HashKey Group senior researcher Tim Sun said Bitcoin benefits from its relatively settled non-security status, while tokenized securities and real-world assets could also face less disruption because they can operate within existing securities and fund rules. DeFi developer liability and exchange token-listing standards remain more dependent on future policy decisions.

Jag Kooner, head of derivatives at Bitfinex, said the muted initial market response showed that traders had not positioned heavily for the bill to pass. “With few market participants betting on the bill’s approval, there were correspondingly few positions to unwind after it failed, which helps explain the market’s modest reaction,” he said.

The next fixed regulatory milestone is Oct. 20, when comments close on the SEC’s Regulation Crypto Assets proposal. Any CFTC market-structure proposal would create another formal rulemaking track. Senate records did not list another CLARITY Act vote date, leaving the legislative path forward dependent on Senate scheduling and leadership decisions.

Once added, BigGo Finance appears first in Google Search Top Stories, so you get the broadest, most up-to-the-minute, and most comprehensive global financial news first.

Source: finance.biggo.com