What Is the CFTC Preparing to Regulate?
The Commodity Futures Trading Commission has sent a new crypto market rulemaking initiative to the White House for review, moving ahead with an agency-led framework only days after the Senate failed to advance the Digital Asset Market Clarity Act.
The Office of Information and Regulatory Affairs received the CFTC submission on September 17 under the title “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets.” The filing is listed as a prerule action and remains pending review, meaning the public entry does not yet contain the detailed regulatory text that would show exactly which transactions, platforms or market participants will be covered.
The timing matters. The Senate rejected cloture on the motion to proceed to the Clarity Act on September 15, leaving Congress without the comprehensive statutory market structure that would have divided responsibilities for digital assets between the CFTC and Securities and Exchange Commission.
CFTC Chair Michael Selig had already prepared for that possibility. In August, he directed agency staff to explore how the CFTC could use its existing statutory powers to establish rules for crypto asset markets if Congress failed to act.
How Far Can the CFTC Go Without Congress?
Selig previously outlined one possible model in which existing CFTC registrants and currently unregistered crypto exchanges could seek designation as a form of designated contract market focused on crypto assets.
Under that approach, a “crypto asset market” could potentially offer leveraged or margined digital asset trading under CFTC oversight and rules designed specifically for those products.
The OIRA submission does not confirm that the final proposal will adopt that exact structure. It does show, however, that the agency’s work has moved beyond public speeches and internal policy discussions into the federal regulatory review process.
That distinction is important for exchanges and trading firms. A congressional law could explicitly expand or redefine the CFTC’s jurisdiction, while agency rulemaking must remain within powers the regulator believes it already has. That could leave some parts of the spot crypto market outside the framework and increase the possibility of legal challenges over how far the agency’s existing authority extends.
Investor Takeaway
The failure of the Clarity Act has not stopped U.S. crypto regulation. It has shifted more of the immediate work to the agencies, where the SEC and CFTC are now using existing powers to build pieces of a market structure that Congress had been expected to establish through legislation.
Why Are the SEC and CFTC Moving at the Same Time?
The CFTC filing is part of a broader burst of agency activity following the Senate vote.
On September 17, the SEC issued its long-awaited “Innovation Exemption,” giving qualifying Tokenized Securities Venues temporary and conditional relief from the definition of an exchange so they can facilitate trading in certain tokenized U.S.-listed stocks through permissioned automated market makers and liquidity pools.
The CFTC separately issued a no-action position covering providers of passive trading software. Subject to specified conditions, staff said they would not recommend enforcement action against qualifying software providers for failing to register as introducing brokers or associated persons when their software facilitates trading through registered futures commission merchants, introducing brokers and designated contract markets.
Together, the actions show both regulators attempting to resolve specific crypto market questions without waiting for another congressional vote.
Does This Replace the Clarity Act?
Agency rulemaking cannot fully replicate legislation. The Clarity Act was designed to establish a statutory framework defining how digital assets would be divided between securities and commodities regulation and how trading platforms could operate under federal law.
Rules issued by the CFTC or exemptions granted by the SEC can address parts of that structure, but they remain tied to each agency’s existing legal authority and can be changed by later commissions, challenged in court or superseded by Congress.
That makes the OIRA filing important but still preliminary. White House regulatory review comes before publication of many significant federal rulemaking actions, and the current entry is classified only at the prerule stage. There is no public proposed text yet and no disclosed timetable for when detailed rules could emerge.
For crypto exchanges, developers and trading firms, the immediate question is therefore shifting from whether Washington will regulate digital asset markets to which parts of the framework regulators can build themselves. The failed Senate vote left the statutory framework unfinished, but the CFTC is now testing how much of that gap it can fill without new legislation.
