CFTC moves to regulate crypto markets via existing authority

Filed on Sept. 17 with the Office of Information and Regulatory Affairs, the proposal titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets” marks a tactical pivot for CFTC Chair Michael Selig. With federal legislation stalled in the Senate following a 49-50 procedural vote, Selig is pressing forward with a plan to govern digital commodity markets through the agency’s existing mandate. The framework aims to designate crypto exchanges as a form of contract market, potentially allowing them to offer leveraged or margined trading under established commission rules.

This executive review process remains in its infancy, as the contents of the filing stay private and the commission itself faces significant internal constraints. Selig currently serves as the agency’s sole confirmed commissioner, leaving the burden of the crypto agenda on his shoulders. Even if the White House returns the proposal, it must still undergo a formal commission vote and a public comment period before becoming law. Parallel to this, the agency recently issued a no-action position for specific software developers, mirroring provisions previously debated in the failed CLARITY Act. As lawmakers continue to clash over ethics disclosures and the scope of developer protections, federal regulators are increasingly operating on the assumption that legislative gridlock will remain the status quo for the foreseeable future.