The Commodity Futures Trading Commission will start writing its own crypto market rules if Congress fails to pass the CLARITY Act, chairman Michael Selig said, setting up a regulatory fallback days before a Senate cloture vote on the bill.
Selig told the agency’s Innovation Advisory Committee that he has directed CFTC staff to explore rulemaking under existing authority. The plan would let registered firms and unregistered crypto exchanges apply for designation as a new type of designated contract market, a category the agency calls a crypto asset market, and offer leveraged or margined crypto trading under CFTC oversight.
“If CLARITY continues to stall because of Democrats, the CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets,” Selig said. “We owe it to the American people to do so.”
A parallel track at the SEC
The move runs alongside work at the Securities and Exchange Commission. SEC chairman Paul Atkins said in a recorded video this week that the agency’s crypto fundraising proposal sits at the center of its agenda and that the agency supports the market structure bill, but that time matters. The two agencies have coordinated through Project Crypto, an effort to build a shared taxonomy for which crypto assets count as securities and which do not.
Selig said an SEC crypto framework reportedly includes provisions aligned with the Senate bill, which lowers the risk of the two regulators issuing conflicting rules if the legislation fails.
The bill’s fading odds
Prediction markets have turned sharply against 2026 passage. Odds of enactment this year have fallen to roughly 14 percent, down from 82 percent in February, and the Senate has scheduled a September 15 cloture vote. Selig said the agency would give the bill “breathing room for a vote” before moving on its own.
The chairman argued the fallback would not be improvised. He pointed to the Commodity Futures Modernization Act of 2000, which replaced prescriptive derivatives rules with a principles-based framework, as the legal foundation the agency can build on without new legislation. That statute, he noted, was written to future-proof the agency’s markets, and the CFTC has supervised derivatives trading for decades under it.
Selig also framed the fallback in political terms. “President Trump promised to deliver a crypto asset market structure, and we will help him deliver if Congress will not,” he said, adding that the framework should be one that “cannot be undone by the crypto haters.”
What the fallback would change
Under the outline Selig described, crypto exchanges could be designated as crypto asset markets and trade digital assets on a leveraged or margined basis under purpose-fit rules. He also flagged a legal path for developers to offer decentralized finance protocols in the United States, an area where no federal registration route exists today.
The perps question sits close to the surface. Roughly 93 percent of crypto derivatives traded globally are perpetual futures, and none trade on regulated US venues. The Blockchain Association petitioned the CFTC in February to allow digital asset perpetuals through a Section 4(c) exemptive order, arguing perps should be treated as futures rather than swaps. Selig has said he wants perpetuals to “flourish across both centralized and decentralized markets,” and the agency’s Innovation Task Force has been collecting comment on the classification question since March.
Not everyone in traditional markets is comfortable with the pace. CME Group chief executive Terry Duffy, whose exchange operates under CFTC jurisdiction, called one recent first-of-its-kind crypto approval “a disaster waiting to happen” on CNBC. CME has also asked a federal court to dismiss a lawsuit it filed over crypto perpetuals, and the CFTC has moved to dismiss that case on standing grounds.
The governance problem
There is a structural wrinkle. Selig currently serves as the lone commissioner on what is meant to be a five-person bipartisan panel, giving him unusual unilateral say over everything from prediction markets to crypto products. Lawmakers in both parties, including Senate Agriculture Chair John Boozman and House Agriculture Chair GT Thompson, have pressed the White House to nominate additional commissioners, and many Democrats want new seats filled as part of any crypto bill negotiation.
The White House has said it plans to nominate “more America First patriots to the commission in the near future,” according to a spokesperson. Critics inside and outside the agency argue that rulemaking of this scale should not rest on one official’s judgment, particularly when the underlying statute gives the agency no explicit mandate over spot crypto markets.
A rulemaking process would still take months, with notice-and-comment requirements before any designation regime goes live. That timing means the practical effect of Selig’s directive is mostly a signal to markets: if the Senate vote fails on Monday, the regulatory gap will not simply sit open. Exchanges planning US expansion would have a named regulator to talk to, even if the rules arrive later than the industry hoped.
For the CLARITY Act itself, the fallback cuts both ways. It removes some of the urgency to compromise before the midterm window closes, since the industry would have a Plan B either way. It also weakens the argument that only Congress can settle the SEC-CFTC jurisdictional line, which has been the bill’s central selling point. Either way, the next checkpoint is Monday’s cloture vote.