CFTC Chief Warns Of Crypto Rules If Clarity Fails

Commodity Futures Trading Commission Chairman Mike Selig said Thursday that if Congress fails to deliver the Digital Asset Market Clarity Act, his agency is already working on alternative regulations, telling the inaugural meeting of the Innovation Advisory Committee that it would not sit idle.

A fallback if Congress stalls

“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,” Selig said. He said he has directed staff to explore rules to codify a CFTC market structure for crypto assets, in a move he framed as heeding President Donald Trump’s call to codify a “future-proof” digital asset market structure.

The agency’s sister regulator, the Securities and Exchange Commission, proposed its own major crypto rule this week, known as Regulation Crypto Assets, to allow startups to raise funds with fewer regulatory hurdles. The two agencies had previously issued a joint policy stance defining the different kinds of digital assets.

Political stakes

The advancement of the Clarity Act still depends on action in the U.S. Senate, where it needs 60 votes in a final three-week window. One of the biggest outstanding issues is whether the White House will agree to a revised ethics provision presented by a bipartisan pair of Senators, Ruben Gallego and Thom Tillis. Selig warned that passing the bill was the surest way to prevent “another Gary Gensler from running a rogue campaign of lawfare” against the industry.

“Ripple had the unfortunate reality of being at the center of the bullseye of the SEC’s lawfare in the previous administration,” Ripple Labs CEO Brad Garlinghouse said at the meeting. “What a difference leadership makes.”

What it means for the industry

Selig has also steered staff toward work with developers to build rules to “offer their protocols in a legal and compliant manner in the United States.” The CFTC chair has attracted attention in recent months for leading a legal push over prediction markets, and he said more rule proposals for that sector, including consumer protection requirements, are coming soon. The agency has also already started its work regulating prediction markets, proposing rules to govern the space.