CFTC Signals Crypto Rulemaking Push if Clarity Act Fails in Senate

What to Know

• Commodity Futures Trading Commission Chair Mike Selig said the agency will not sit idle if Congress fails to pass the Digital Asset Market Clarity Act.
• Selig told the inaugural meeting of the Innovation Advisory Committee that CFTC staff has been directed to explore crypto market-structure rules using existing agency authority.
• The agency is considering a regulatory label for crypto asset markets similar to the CFTC’s existing designated contract markets framework.
• Selig said more proposals are coming for prediction markets, including changes tied to corporate rules, listing rules and consumer protection requirements.
• The Senate still needs to act on the Clarity Act, which requires 60 votes and faces unresolved concerns from lawmakers in both parties.
• The Securities and Exchange Commission recently proposed Regulation Crypto Assets, while both agencies have been working to clarify how digital assets fit into regulatory categories.
• Ripple Labs CEO Brad Garlinghouse said prior U.S. regulatory resistance pushed the company to grow outside the country and argued that clarity is needed to unlock digital asset technology responsibly.

CFTC Prepares a Backup Path for Crypto Oversight

The Commodity Futures Trading Commission is preparing a direct regulatory response if the Digital Asset Market Clarity Act remains stalled in Congress, with Chair Mike Selig telling crypto executives that the agency has already begun work on market-structure rulemaking for digital assets. The message marks a significant escalation from the U.S. derivatives regulator, which has long been viewed by many digital asset firms as a potentially more suitable market watchdog for crypto trading activity than the Securities and Exchange Commission.

Speaking at the inaugural meeting of the Innovation Advisory Committee, Selig said the CFTC would use its existing authorities to begin constructing a regime for crypto asset markets if lawmakers fail to deliver new legislation. His comments framed the agency as prepared to move quickly, even as the industry continues to press Congress for a statutory framework that would define which digital assets fall under which federal regulator.

The Clarity Act remains the industry’s favored route because legislation can create durable rules that are harder to reverse under future administrations. Still, Selig’s remarks indicate that the CFTC is preparing a contingency plan. The central idea is to explore a category for crypto asset markets that would resemble the agency’s existing designated contract markets structure, a framework used in the derivatives world for regulated trading venues.

Selig Says Staff Has Been Directed to Explore Rules

Selig told attendees that he has directed CFTC staff to begin exploring rules that would codify a CFTC market structure for crypto assets under the agency’s current powers. He said the agency would be positioned to move swiftly if the legislative path continues to stall, and he also pointed to work aimed at allowing developers to offer protocols in a legal and compliant manner in the United States.

That developer-focused language is important for the crypto industry because market participants have long argued that unclear U.S. rules have made it difficult to launch products, maintain open-source software projects and build compliant platforms domestically. While federal regulators have often focused on exchanges, tokens and investor protection, developers have sought reassurance that publishing code or building infrastructure will not automatically expose them to enforcement risk.

Selig’s remarks were unusually political in tone for a sitting regulator. He said that if Clarity continues to stall because of Democratic obstruction, the CFTC would use existing authorities to begin establishing a crypto asset market regime. He also invoked President Donald Trump’s call for a future-proof digital asset market structure and said such a framework should not be undone by opponents of crypto.

For market participants, the immediate takeaway is not that the CFTC has already completed a new crypto rulebook. Rather, the agency is signaling that it is actively developing the architecture for one. That distinction matters because formal rulemaking requires proposals, public input and a finalization process. Still, the public commitment by the chair raises the likelihood that the CFTC could become more aggressive in defining its crypto remit if Congress does not act.

Clarity Act Remains the Preferred Route

Despite the CFTC’s preparation, Selig said passing the Clarity Act remains the surest way to prevent a future return to what industry advocates have described as regulation by enforcement. He specifically referenced former SEC Chair Gary Gensler, whose tenure remains a central point of criticism among digital asset companies that faced lawsuits, investigations and uncertain registration expectations.

The Clarity Act still depends on action in the U.S. Senate. Its odds have weakened with every passing week, and lawmakers face a final three-week window to give the bill its last shot at securing the 60 votes it needs. Members of both parties, though mostly Democrats, have said their concerns with the current draft have not yet been resolved.

One major unresolved issue is whether the White House will agree to a revised ethics provision presented by Senators Ruben Gallego and Thom Tillis. That detail has become part of the broader negotiation over how to balance crypto market access, investor protection, political accountability and future regulatory authority. Until those concerns are addressed, the bill’s path remains uncertain.

For crypto firms, legislative uncertainty has become a recurring strategic problem. A clear market-structure law could define when tokens are commodities, when securities rules apply, how trading platforms should register, and how federal agencies should coordinate. Without that framework, companies must continue to interpret overlapping signals from the CFTC, the SEC and the courts.

SEC Also Moves on Digital Asset Rules

The CFTC is not acting in isolation. The Securities and Exchange Commission recently proposed its first major crypto rule, Regulation Crypto Assets, which is intended to allow crypto startups and fundraising activity with fewer regulatory hurdles. The proposal suggests that the SEC is also shifting toward formal rulemaking after years in which the industry argued that enforcement cases were doing too much of the work.

The SEC and CFTC had previously issued a joint policy stance defining different kinds of digital assets and the regulatory buckets they should fall into, though that stance was not a formal rule. The lack of a binding rule has kept the industry focused on Congress, where a comprehensive law could settle many of the jurisdictional questions that continue to affect token issuers, exchanges and developers.

SEC Chair Paul Atkins said at an event with President Donald Trump on Wednesday that the most important priority is for Congress to send the Clarity Act to the president’s desk for signature. Atkins has repeatedly argued that legislation would provide permanence for crypto policy, a view echoed by many market participants who want rules that do not shift dramatically from one administration to the next.

The emerging dynamic suggests a two-track process. Regulators are preparing rule proposals that could reshape crypto oversight under existing law, while still urging Congress to deliver a more durable statute. If Congress succeeds, agency rules could be built around the new law. If Congress fails, the CFTC and SEC may try to fill the gap using their current mandates.

Ripple CEO Says U.S. Clarity Is Critical

Ripple Labs CEO Brad Garlinghouse used the meeting to highlight the industry’s frustration with the prior regulatory environment. He said Ripple had been at the center of the bullseye of the SEC’s lawfare under the previous administration and argued that the change in leadership has made a major difference for the sector.

Garlinghouse said the previous approach forced Ripple to hire and grow outside the United States. His comments reflected a broader industry complaint that regulatory uncertainty has pushed jobs, capital and product development into other jurisdictions where crypto rules are perceived as clearer or more predictable.

He also said the technologies represented at the meeting can make money movement faster, more efficient and more accessible. However, he emphasized that clarity is needed to unlock that potential responsibly. That framing reflects a common industry argument: innovation and consumer protection are not mutually exclusive, but both require a predictable legal environment.

For firms building payment networks, trading venues, infrastructure tools and tokenized products, the distinction between legal uncertainty and defined compliance obligations is critical. Companies can often adapt to strict rules if those rules are clear. What many say they cannot manage is a shifting landscape where the same product might be treated differently depending on the regulator, administration or court venue involved.

Prediction Markets Also in Focus

The CFTC meeting also covered artificial intelligence and prediction markets, two areas that increasingly overlap with digital platforms and retail-facing financial products. Selig has drawn attention in recent months for the agency’s legal fight with state governments over prediction market oversight, where he has sought to defend the CFTC’s exclusive jurisdiction in court through numerous lawsuits.

The agency has already begun work on regulating prediction markets and has proposed rules for the sector. Selig said the CFTC has further plans to issue more proposals soon, including efforts to modernize corporate rules and listing rules for designated contract markets that list event contracts. He also said the agency intends to institute consumer protection requirements.

Prediction markets have become a major regulatory flashpoint because they can resemble derivatives, wagering products, information markets or political forecasting tools depending on how they are structured. The CFTC’s position that it has exclusive jurisdiction in key areas could determine how platforms operate across the United States and whether state-level restrictions can apply.

The connection to crypto is also meaningful. Many prediction market platforms use digital infrastructure, automated settlement tools or blockchain-adjacent models. As a result, the CFTC’s approach to event contracts could influence broader expectations for how regulators supervise novel financial technology products that do not fit neatly into older categories.

Why the CFTC’s Signal Matters for Crypto Markets

The CFTC’s willingness to pursue crypto asset market rules could reshape the regulatory conversation in Washington. For years, crypto firms have argued that many digital assets behave more like commodities than securities once they trade on secondary markets. The CFTC’s mandate over derivatives and certain commodity-related markets has made it a focal point for companies seeking a federal framework outside traditional securities law.

However, the agency’s authority is not unlimited. Without new legislation, any CFTC rulemaking would need to rest on existing powers. That could create legal and operational limits, especially for spot crypto markets that have historically sat in a more ambiguous federal space. A CFTC-led regime might provide more structure, but it could also face challenges if market participants or other authorities question the scope of the agency’s jurisdiction.

That is why the Clarity Act remains central. A law passed by Congress could define the CFTC’s role more explicitly and reduce the risk of future disputes between agencies. It could also give companies a clearer compliance path and help regulators establish consistent expectations for registration, disclosures, custody, trading, market surveillance and anti-manipulation controls.

Until then, crypto companies will be watching both the Senate and the agencies. If the bill advances, the industry may move toward a legislative framework. If it fails, the CFTC’s rulemaking push could become the next major battleground in U.S. digital asset policy.

Frequently Asked Questions (FAQs)

What did CFTC Chair Mike Selig say about crypto regulation?

Selig said the CFTC is preparing to use its existing authorities to establish a crypto asset market framework if Congress fails to pass the Digital Asset Market Clarity Act.

What is the Digital Asset Market Clarity Act?

It is proposed legislation intended to set out rules for crypto markets and clarify how digital assets should be regulated in the United States.

Why is the Senate important for the Clarity Act?

The bill still depends on Senate action and needs 60 votes. Lawmakers have a final three-week window to give it another chance at passage.

What kind of crypto framework is the CFTC considering?

Selig said staff is exploring a regulatory structure for crypto asset markets that would be similar in concept to the CFTC’s existing designated contract markets category.

How is the SEC involved in crypto rulemaking?

The SEC recently proposed Regulation Crypto Assets, which is intended to allow crypto startups and fundraising with fewer regulatory hurdles. The SEC and CFTC have also worked on policy positions about digital asset categories.

What did Brad Garlinghouse say at the meeting?

The Ripple Labs CEO said prior regulatory pressure pushed the company to hire and grow outside the United States, and he argued that clear rules are needed to unlock crypto technology responsibly.

Why are prediction markets part of the discussion?

The CFTC is also focused on prediction markets and plans additional proposals related to event contracts, listing rules, corporate rules and consumer protection requirements.

Does this mean the CFTC has already finalized crypto rules?

No. Selig said staff has been directed to explore and develop rulemaking options. Formal rules would still need to go through the regulatory process before becoming final.

Photo by Alesia Kozik on Pexels