CFTC Chair Readies Crypto Rules If Congress Fails to Pass Clarity Act

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In brief CFTC Chair Michael S. Selig directed staff to explore crypto market structure rules using the agency's existing authority.

Selig said he will direct staff to formally propose the rules if the Clarity Act remains stalled in Congress.

The potential framework could cover crypto exchanges, leveraged trading, and on-chain finance protocols.

Commodity Futures Trading Commission Chair Michael S. Selig has directed agency staff to begin developing crypto market structure rules, preparing the regulator to act if Congress fails to pass the Clarity Act.

Speaking Thursday at the inaugural meeting of the CFTC's Innovation Advisory Committee, Selig said passing bipartisan market structure legislation remains his preferred path. If the bill remains stalled, however, he said the CFTC will use its existing authority to establish a regulatory framework for crypto markets, calling it “the most important step towards future-proofing this industry is passing this bipartisan bill.”

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The Clarity Act would establish a federal framework for digital assets and clarify the CFTC and SEC’s roles in overseeing crypto markets. Selig said legislation would make those rules harder for a future administration to reverse.

"Passing Clarity is the surest way that we can prevent another Gary Gensler from running a rogue campaign of lawfare against the individuals and companies in this room today," Selig said, referring to the former SEC chair who brought several costly lawsuits against crypto startups.

On Wednesday, President Donald Trump urged Congress to pass a “fair version” of the Clarity Act. However, if Congress fails to act, Selig said, the CFTC is prepared to move ahead on its own.

"If Clarity continues to stall because of Democrat obstruction, the CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets," he said.

Selig has already directed staff to begin exploring what those rules could look like.

"To achieve this, I've directed the CFTC staff to begin exploring rules to codify a CFTC market structure for crypto assets using the agency's existing authorities," he said.

Under the framework outlined by Selig, current CFTC registrants and currently unregistered crypto exchanges could come under CFTC oversight and offer leveraged or margined crypto trading under rules tailored to digital asset markets.

Selig also directed staff to work with developers of on-chain finance protocols on how they could legally operate in the United States.

"I've also directed staff to engage with developers of on-chain finance protocols to establish ways in which developers can offer their protocols in a legal and compliant manner in the United States, future-proofing developer protections once and for all," he said, referencing previous comments made by President Trump.

During the press conference with leading crypto executives on Wednesday, Trump also said Selig is working to bring decentralized perpetual futures exchange Hyperliquid into the United States.

Selig said the agency will give Congress more time to pass the Clarity Act before moving forward on its own.

"Rest assured, I will direct CFTC staff to move swiftly to propose these rules for the industry," he said.