CFTC to Draft Crypto Rules Using Existing Authority

WASHINGTON. The Commodity Futures Trading Commission will keep drafting crypto rules under its existing statutory authority instead of waiting for Congress, chairman Michael Selig said in comments reported on October 4. The agency is weighing a separate market framework under the Commodity Exchange Act that would let it supervise crypto exchanges and leveraged trading directly. Selig spoke after joining the president’s Digital Asset Markets Working Group, where officials reviewed each agency’s statutory authority and identified the areas that genuinely require new legislation. His argument is that most of the work can start now: regulators already hold substantial power under current law, and the commission intends to use it while the legislative calendar stays uncertain. One review stands out. The CFTC is studying a plan that would allow crypto exchanges without CFTC registration to offer services to US customers, on condition that they operate under agency supervision and meet requirements the commission sets. That would mark a break from the current setup, in which unregistered offshore venues serve American traders only at their own legal risk. The commission is also reviewing how far its leverage and margin rules stretch over tokens treated as commodities, an area where retail traders currently get whatever protections an offshore venue volunteers.

A gap left by the Clarity Act

The urgency comes from the Senate. The Clarity Act, the market structure bill meant to divide crypto oversight between the CFTC and the SEC, failed in a cloture vote last month. Without it, both agencies have said since September that they would clarify crypto regulation on their own, and dealmaking has continued in the gap: crypto mergers and acquisitions reached a record $9.7 billion in the first half of 2026, according to investment bankers cited in the press this week. Selig’s agency has not been idle in the meantime. In January he announced Project Crypto as a joint effort with the SEC and directed staff to consider codifying a shared framework as an interim measure while Congress works. He also ordered drafts of rules for off-exchange leveraged retail commodity transactions in crypto under the actual delivery exception, and floated a new registration category tailored to venues that trade retail crypto derivatives. A separate rulemaking on event contracts is in the works as well, which Selig has argued the current framework has failed to serve. The next phase adds detail. Under the plan reported on October 4, a market framework built on the Commodity Exchange Act would give the commission direct oversight of crypto exchanges and leveraged trading, closing a space offshore venues still occupy. A second track would admit unregistered exchanges into a supervised program rather than push them offshore. Both would depend on rulemaking dockets that typically run six months to two years from proposal to final text, so Sandia, er, practical relief for traders arrives slowly no matter how fast the staff writes.

The SEC moves in parallel

The SEC is walking the same road. Chair Paul Atkins said on October 2 that the agency plans to update custody rules written in 1940 so they fit digital assets, and to keep issuing proposals designed to hold digital asset markets inside the United States. Atkins is also weighing a five year innovation exemption for decentralized exchanges, though former SEC official John Reed Stark has argued the plan exceeds the agency’s authority. The groundwork is already public. The SEC proposed Regulation Crypto Assets on August 18. The draft includes a $5 million offering exemption spread over four years, a $75 million exemption over any twelve month period for issuers who file financial statements and accept ongoing reporting, and a safe harbor that can move some tokens outside the definition of an investment contract. It would also preempt certain state registration rules for covered offerings. For small projects the first exemption is the meaningful one: teams could raise up to $5 million over four years without a registration statement, cushioning token offerings that now face the full securities process.

In May the commission approved a framework for bitcoin perpetual futures and issued related guidance, its first concrete move on crypto derivatives under Selig. He has also framed the effort as overdue. “Americans deserve regulatory clarity and consumer protections in crypto asset markets,” he said, according to CoinFomania. Critics see legal risk in regulators acting alone. Rules written by two agencies without a statute can be challenged in court, and conditional permission for unregistered exchanges would blur lines the Commodity Exchange Act never contemplated. The SEC’s exemption plan has drawn the same objection from its own former officials, who argue Congress never handed the agency that flexibility. Market watchers add a timing worry. Rule proposals need comment periods, final texts need votes, and automatic stays and judicial review can stretch for years, so the bridge the agencies are building may outlast the session that failed to pass it. For markets, the practical effect is incremental rulemaking through comment periods rather than one clean law. Bitcoin held near $85,000 through the weekend, and spot bitcoin ETFs posted their first solid inflow stretch since late September last week, so the institutional bid has not waited for Congress. Both agencies have promised further proposals before year end, which means the shape of US crypto policy will arrive in dockets, blockquotes and Federal Register entries rather than in a signing ceremony.