Selig Turns up the Heat as CFTC Readies Its Own Crypto Rules

Speaking Thursday at the CFTC Innovation Advisory Committee’s inaugural meeting in Washington, Selig explained that legislation remains his preferred route but made clear the agency is preparing to use powers it already has.

“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 explained during the meeting.

Selig Orders the CFTC to Build a Plan B

Selig said he directed CFTC staff to explore rules that would establish a federal market structure for crypto assets without waiting for Congress. The framework could cover existing CFTC registrants as well as cryptocurrency exchanges that currently operate outside the agency’s registration system.

Those platforms could potentially register as a specialized type of designated contract market, or DCM, called a “crypto asset market.” The designation could allow platforms to offer leveraged or margined cryptocurrency trading under rules specifically designed for those markets.

Selig is also targeting onchain software like Hyperliquid. He directed staff to work with developers of onchain finance protocols on ways they could legally offer their technology in the United States, an area that has generated years of uncertainty over when software developers can face regulatory liability.

Clarity Act Runs Into the Senate Wall

The regulatory backup plan comes as the Digital Asset Market Clarity Act struggles to clear Congress. The legislation would broadly place spot trading of digital commodities under CFTC oversight while leaving securities and certain investment contracts under the Securities and Exchange Commission.

The House passed its version in 2025, while Senate committees advanced related legislation in 2026. Negotiations have since bogged down over government ethics restrictions, stablecoin yields, decentralized finance (DeFi) protections and other policy disputes.

Senate Majority Leader John Thune indicated earlier in August that a vote would not happen before the August recess, pushing potential consideration into mid-September. Supporters face another hurdle because 60 votes are needed to overcome a filibuster.

Washington’s Crypto Clock Is Running

Selig and SEC Chairman Paul Atkins have argued that legislation offers cryptocurrency companies greater certainty than regulations written by agencies. A federal statute is considerably harder for a future administration to reverse.

The CFTC’s preparations also build on earlier coordination with the SEC, including Project Crypto, an effort aimed at clarifying which digital assets fall under each regulator and reducing overlapping requirements.

The stakes extend beyond Washington. Cryptocurrency companies have argued that unclear federal rules make it harder to build products in the United States while overseas jurisdictions establish more defined regulatory frameworks.

If Congress fails to pass the Clarity Act, CFTC rulemaking could provide an interim path for exchanges and developers, but it would carry less permanence and potentially face court challenges or reversal under a future administration.

September now becomes the critical window. The CFTC is preparing to implement the Clarity Act if Congress delivers it, while Selig’s directive ensures the agency is also preparing to move without lawmakers if the legislation stalls again.