CFTC Signals Crypto Rulemaking Under Existing Authority if Congress Stalls
The CFTC chairman has directed staff to explore creating a market structure for digital assets under the agency's current powers, citing stalled legislation.
In a significant policy signal, CFTC Chairman Michael Selig has directed agency staff to explore using existing authority to establish a market structure for crypto assets. The move comes amid concerns that the CLARITY Act, a bipartisan legislative effort to regulate digital assets, may not pass Congress in a timely manner. This directive could bypass the legislative stalemate and create a regulatory framework for digital asset markets directly through the CFTC's rulemaking process. For financial institutions and crypto-native firms, this development presents both opportunities and challenges. A formal CFTC-regulated market could provide much-needed legal clarity, potentially allowing crypto exchanges to register as a new type of designated contract market (DCM) for leveraged trading. However, it would also introduce new compliance and oversight burdens. Legal and compliance teams should closely monitor the CFTC for any forthcoming proposed rules and prepare to engage with the rulemaking process, as the outcome could reshape US digital asset trading and DeFi protocol operations.