Key Highlights
- CFTC said it could use its existing authority to create a new market structure for crypto assets if Congress fails to pass the CLARITY Act.
- Some registered and unregistered crypto exchanges could potentially operate as regulated crypto asset markets offering leveraged or margined trading.
- Galaxy Research recently cut its estimated chance of the bill passing to 10%, while prediction-market odds fell to about 26%.
The U.S. Commodity Futures Trading Commission (CFTC) is preparing to explore a new crypto market structure if Congress fails to pass the CLARITY Act.
Speaking at the CFTC Innovation Advisory Committee meeting on August 20, Chairman Michael S. Selig said the agency would use its existing authority to create rules for crypto markets and exchanges.
The remarks came a day after President Donald Trump urged Congress to advance the stalled legislation during a meeting with crypto executives, financial-market leaders and U.S. regulators at the White House.
CFTC prepares alternative crypto framework
Selig said he has directed CFTC staff to begin exploring rules that could create a CFTC market structure for crypto assets. Under the proposed approach, current CFTC registrants and some crypto exchanges that are not registered could potentially be designated as a type of designated contract market (DCM) called a crypto asset market. These markets could offer leveraged or margined crypto trading under CFTC oversight and rules designed for digital assets.
The CFTC chairman made clear that Congress still has the first chance to set the wider rules. Selig said he remains hopeful that lawmakers will send a bipartisan crypto market-structure bill to Trump. He called the passage of the CLARITY Act the most important step toward giving the industry long-term rules.
But he also laid out what could happen if the bill stays stuck. “If CLARITY continues to stall because of Democratic obstruction, the CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets,” Selig said.
Trump urges Congress to advance CLARITY Act
The CLARITY Act remains before Congress after the House passed the bill about 13 months ago.
President Trump called on Congress to pass a “fair version” of the CLARITY Act during the August 19 White House meeting. The legislation would establish a broader federal regulatory framework for digital assets and clarify the respective roles of the CFTC and Securities and Exchange Commission.
The growing doubts around the bill are another part of the story. Galaxy Research, the research arm of digital-asset firm Galaxy Digital, said on August 14 that it had lowered its estimated chance of CLARITY passing to 10%, from 60% after a Senate Banking Committee markup in May and 30% in late July.
Separately, prediction-market odds that the bill might pass in 2026 also fell from about 82% to roughly 26%.
CFTC also targets onchain finance
The CFTC’s efforts would extend beyond centralized exchanges.
Selig said he directed staff to work with developers of onchain finance protocols to find ways they can offer their protocols legally and in line with U.S. rules. The agency is also working with the Securities and Exchange Commission (SEC) through Project Crypto to create a clearer line between crypto assets that are securities and those that are not.
The proposed approach would therefore give crypto exchanges another possible route into a federal framework while Congress continues its debate over legislation.
Broader CFTC agenda includes AI and prediction markets
Selig presented the possible crypto rules as part of a wider CFTC plan covering new areas of finance. He said blockchain, artificial intelligence and prediction markets are changing financial markets, and argued that clear rules are needed as these markets grow.
The CFTC’s Innovation Advisory Committee held its inaugural meeting on August 20, with crypto regulation among the issues discussed.
For now, Selig said the agency would give Congress room to act on the CLARITY Act. If lawmakers cannot reach an agreement, however, the CFTC is preparing to move ahead with rules based on the powers it already has.
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