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As sweeping crypto legislation stalls in Congress, the SEC and CFTC are stepping in to craft rules for the digital asset industry, but the path is fraught with political and legal uncertainty. The SEC is advancing a rule to exempt certain token offerings from securities laws, while the CFTC has approved perpetual bitcoin futures and signaled openness to more. The two agencies jointly issued a token taxonomy in March 2026 that classified most crypto assets as outside SEC jurisdiction, though that guidance remains interpretive rather than binding. Industry executives welcome the regulatory momentum but warn that agency rules can be reversed by future administrations, evoking fears of a return to the enforcement-heavy approach of former SEC Chair Gary Gensler. Wall Street opposition, potential Democratic gains in the midterm elections, and ongoing litigation from the CME Group add further complications. Crypto leaders say they need permanent legislation, not just temporary agency action, to achieve lasting regulatory clarity.
Key Elements
As sweeping U.S. crypto legislation stalls in Congress, President Donald Trump’s regulators are moving to fill the void, but the rulemaking path ahead is fraught with political volatility, legal challenges, and the looming threat of reversal under a future administration.
Deep-pocketed crypto companies have spent hundreds of millions of dollars over several years campaigning for legislation they argue would put the industry on solid legal ground. That effort has now ground to a halt, with little time for lawmakers to reach a deal before the new Congress convenes next year. The impasse has shifted the burden to Trump’s crypto-friendly regulators, particularly the Securities and Exchange Commission and the Commodity Futures Trading Commission, to deliver the regulatory clarity the industry has long demanded.
The SEC has been working on a rule to exempt certain token offerings from securities rules, a proposal expected to advance in the coming weeks. The CFTC, meanwhile, has signaled it will discuss crypto regulation at an industry gathering this week.
“The agencies … seemingly are ready to act, given that Congress has been unwilling or unable to do so,” said Miller Whitehouse-Levine, CEO of the Solana Policy Institute, which advocates for policies to advance digital asset technology.
The Fragility of Agency Rulemaking
Only Congress can create a lasting framework, industry experts caution. The Clarity Act, the marquee legislative vehicle, aims to define which tokens qualify as securities versus commodities and which agencies have oversight of the sector. Without legislation, regulations remain vulnerable to shifting political winds and court challenges, creating lingering hazards for the crypto industry, according to executives and analysts.
The Trump administration’s own aggressive rollback of dozens of SEC and consumer watchdog policies introduced under former Democratic President Joe Biden has underscored that risk. Some executives fear a future administration could install crypto hawks like former SEC Chair Gary Gensler, who under Biden sued dozens of crypto companies, alleging their tokens amounted to securities and that the companies should have registered with the agency.
Josh Riezman, chief legal and strategy officer at crypto trading firm GSR, said he expects the SEC and CFTC to push through ambitious rules quickly, which would help the industry in the short term. “But then the next administration, depending on how that shakes out, we can be looking very much like a potentially Gensler 2.0 type scenario,” he added. Gensler, who maintained that fraud in the crypto sector necessitated tough enforcement, did not respond to a request for comment.
A CFTC spokesperson said the Clarity Act is crucial to ensuring American competitiveness and that Congress should take the opportunity to set “durable” rules. “If that doesn’t happen, the CFTC stands ready to protect America’s leadership in financial markets and ensure we remain the crypto capital of the world,” the spokesperson said.
A Shift in SEC Posture
The regulatory landscape has already shifted dramatically under the current administration. In March 2026, the SEC and CFTC jointly released what SEC Chair Paul Atkins called a “token taxonomy,” sorting crypto assets into categories including digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. The guidance set out a version of the investment contract test: a digital asset counts as a security when its issuer offers it as an investment in a common enterprise with promised profits tied to the issuer’s efforts. That status is not necessarily permanent, as the contract ends once the issuer has either satisfied or failed to satisfy those promises, at which point the token stops being treated as a security. Airdrops, protocol staking, and protocol mining fall outside the SEC’s reach into digital securities under the guidance.
Atkins told reporters the distinction returns the SEC to what he called its core mission of overseeing securities markets, and said the interpretation gives market participants “a clear understanding of how the Commission treats crypto assets.” CFTC Chairman Mike Selig said his agency was adopting the same taxonomy as part of a push toward “harmonization” between the two regulators.
But that guidance remains interpretive, not a binding rule. A formal rulemaking that would carry more legal weight was still pending as of mid-March, with Atkins indicating a proposal expected to run more than 400 pages and include an “innovation exemption” was coming “in a week or two.”
The evolution from enforcement to rulemaking traces back to February 2025, when the SEC replaced its Crypto Assets and Cyber Unit with a new Cyber and Emerging Technologies Unit, or CETU. The unit, comprising 30 attorneys and fraud specialists across nine regional offices, lists six priority areas: fraud schemes driven by artificial intelligence, manipulation through the dark web and social media, hacks exposing material nonpublic information, takeovers of brokerage accounts, fraud tied to crypto assets, and compliance with cybersecurity rules. Atkins was sworn in as SEC chairman on April 21, 2025, and the GENIUS Act passed in July 2025 as the first comprehensive federal legislation regulating stablecoins.
Political and Legal Headwinds
Trump, who courted crypto cash on the campaign trail and whose family has profited from its own token, has prioritized crypto reform in his second administration. His CFTC and SEC appointees swiftly reversed Biden-era crypto policies, voicing support for the industry and pulling back enforcement actions. SEC Chair Atkins has laid out sweeping plans to overhaul capital markets rules to accommodate cryptocurrencies, while CFTC Chair Selig this year approved perpetual bitcoin futures, highly leveraged derivatives products. Industry executives expect the CFTC to allow more perpetual futures for additional assets.
While many Democrats support creating a regulatory framework for cryptocurrencies, they generally favor tougher safeguards against money laundering, fraud, and conflicts of interest than Republican lawmakers. That could become an early obstacle for SEC and CFTC rulemakings, with polls indicating Democrats could regain control of the House of Representatives in the November midterm elections, giving them greater power to scrutinize the agencies.
Traditional Wall Street firms that strongly oppose some SEC and CFTC crypto policies could also complicate matters. The CME Group sued the CFTC in June over its decision to approve perpetual crypto futures, while the Securities Industry and Financial Markets Association, a major Wall Street group, has urged the SEC to consider restrictions on its plan to allow blockchain-based stock trading. Litigation could tie up new crypto rules in court long enough for a future administration to delay, rewrite, or abandon them, much as Trump’s regulators have done with several Biden-era financial regulations challenged by industry.
Even with these expected obstacles, many crypto executives say something is better than nothing. “The agencies moving forward just shows this recognition of, we can’t just stand by and not do anything,” said Summer Mersinger, CEO of the Blockchain Association, who served as a Republican CFTC commissioner from 2022 to 2025. “That’s going to be really helpful and we applaud their work. But we need something permanent.”
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Source: finance.biggo.com