House Financial Services Committee chair French Hill says the crypto rulemaking coming out of the SEC and CFTC cannot substitute for a market-structure law, and he still wants the Senate to take up the Clarity Act in the lame-duck session.
Hill, an Arkansas Republican, credited SEC chair Paul Atkins and CFTC acting chair Mike Selig for stepping in after Congress failed. Both agencies used exemptive relief to give some definition to digital assets and digital commodities. But in comments to Fox Business, he said those policies fall short of what the industry needs and that only legislation can fix it.
The Clarity Act, which Hill authored, would set the rules for most crypto activity in the United States and settle the jurisdictional fight between the CFTC and the SEC over which agency watches digital commodities and which watches securities. The Senate failed to advance it in a 49-50 vote last month. Sen. Cynthia Lummis said afterward that Democrats demanded a provision requiring exchanges to prove they can access and transfer customers’ private keys, language missing from the House version, and then voted no.
After the failed vote, the agencies moved on their own. The SEC rolled out an innovation exemption for tokenized stocks and proposed custody rules for investment advisers and funds. The CFTC sent crypto-markets rulemakings to the White House and floated a plan to bring crypto exchanges under federal oversight.
Why Hill says exemptions do not last
Hill’s core argument is that agency relief is fragile. Exemptions and guidance can be challenged in court or unwound by the next administration. A statute cannot. He told Fox Business he still holds out hope the bill can pass before the new Congress is seated in 2027, arguing a permanent law is needed to keep the United States ahead in digital assets.
That view puts him against the camp in the industry that decided crypto had stopped waiting on Congress. Several exchanges and stablecoin issuers built their 2026 compliance strategies around agency exemptions rather than pending bills. Hill is telling them that strategy has an expiration date. His track record backs the point: he wrote FIT21 in the previous Congress, when House passage showed a market-structure bill could clear one chamber with bipartisan support, and the ground shifted in the Senate since then.
The math in the Senate is the problem. The bill failed by a single vote when it last came up, and there is no public sign the holdouts have moved. Lame-duck sessions are unpredictable, but leaders sometimes use them to clear bills that stalled earlier in the year. Whether the Clarity Act gets that treatment depends on the majority leader’s calendar and on whether anyone negotiates the private-key provision that sank the last vote.
What the agencies have done instead
The SEC’s innovation exemption for tokenized stocks already has takers, and its custody proposal is working through the comment period. The custody rules would spell out how investment advisers and registered funds hold digital assets, a question that has kept some large asset managers on the sidelines. The CFTC’s crypto-markets rulemakings went to the White House Office of Information and Regulatory Affairs for review, a step that usually precedes a public proposal. A separate CFTC plan would pull crypto exchanges that trade digital commodities into federal oversight for the first time, a job the Clarity Act would have assigned by statute.
Each of those actions can be undone. A court can vacate an exemption if it is challenged as arbitrary. A new chairman can rescind guidance with a memo. That is the durable-versus-temporary argument Hill keeps making, and it is the reason he wrote the bill in the first place.
The stakes are concentrated in a few places. Exchanges that list tokens with unsettled security status still cannot get a federally chartered path to trading. Tokenization projects, which grew quickly this year as traditional asset managers put funds and treasury products on public chains, sit entirely on the SEC exemption. Stablecoin issuers, who already operate under the federal stablecoin statute passed last year, are in the strongest position but still face open questions on secondary-market trading that only the market-structure bill would answer.
What happens next
For now, Hill is not ready to hand the job to regulators entirely. He has consistently framed legislation as the only path to lasting certainty for the industry, and his chairmanship gives him control over what moves through the House committee even if the Senate does not act.
The practical effect for markets is more agency-by-agency patchwork in the near term. Tokenized stock issuers will lean on the SEC innovation exemption. Exchanges will watch the CFTC rulemakings for what they say about listing standards and surveillance sharing. Banks and custodians will read the SEC custody proposal for whether they can keep serving digital-asset clients under their existing charters.
Overseas, the pressure to get this done has a competitive edge. South Korea’s Financial Services Commission chairman Lee Eog-weon said on Oct. 8 that the country’s second-phase digital-asset framework, including its stablecoin provisions, is in final-stage consultations. Singapore, the EU and the UAE all run full market-structure regimes today. Every quarter the United States goes without a law, more issuance and trading desks move to jurisdictions where the rules are written down.
If the lame-duck window closes without a vote, the bill starts over in the 2027 Congress with new committee rosters and, likely, new bill text. Hill has signaled he would reintroduce it, and the House would probably pass it again given last Congress’s result. The Senate remains the obstacle. The industry, meanwhile, keeps building on exemptions it knows can disappear, which is the gap he says only Congress can close.