The Commodity Futures Trading Commission (CFTC) is initiating the development of its own cryptocurrency market structure rules as a contingency measure, should Congress fail to pass the Clarity Act. CFTC Chair Michael S. Selig has directed agency staff to begin this preparatory work, signaling the commission’s readiness to establish a regulatory framework if legislative efforts stall.
Selig emphasized that passing bipartisan market structure legislation remains his preferred path. However, he stated that if the Clarity Act remains stalled, the CFTC will leverage its existing authority to create a regulatory framework for crypto markets. This announcement was made during the inaugural meeting of the CFTC’s Innovation Advisory Committee on Thursday.
The Clarity Act is designed to establish a federal framework for digital assets and delineate the regulatory roles of the CFTC and the Securities and Exchange Commission (SEC). Selig suggested that legislative action would result in more durable rules, less susceptible to reversal by future administrations. He also commented that passing the Clarity Act is the most effective way to prevent what he termed “lawfare” against industry participants.
On Wednesday, President Donald Trump encouraged Congress to pass a “fair version” of the Clarity Act. He also indicated that Selig is working to facilitate the entry of the decentralized perpetual futures exchange Hyperliquid into the United States.
Should Congress not advance the Clarity Act, Selig indicated the CFTC is prepared to proceed independently. “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 stated. This potential framework could bring current CFTC registrants and unregistered crypto exchanges under the commission’s oversight, allowing them to offer leveraged or margined crypto trading under rules tailored for digital asset markets.
Furthermore, Selig directed staff to engage with developers of on-chain finance protocols. The objective is to identify compliant methods for developers to offer their protocols within the United States, which he described as “future-proofing developer protections.”
Despite these preparations, the CFTC intends to allow Congress additional time to pass the Clarity Act before formally proposing its own rules. “Rest assured, I will direct CFTC staff to move swiftly to propose these rules for the industry,” Selig added.
Significant uncertainties persist regarding the specific details of the crypto market structure rules the CFTC might develop, as well as the ultimate passage of the Clarity Act. The timeline for the CFTC to propose its own rules, in the event the legislative path is not pursued, remains undefined.
Why This Matters
The materials describe a narrow update: CFTC Chair Michael S. The specific details of the crypto market structure rules the CFTC would develop.
Broader Context
Source materials place the factual news in this context: 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.
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