The CFTC has joined the SEC in proposing new rules for the cryptocurrency industry, a move that comes after the Senate’s failure to pass the Digital Asset Market Clarity (CLARITY) Act. The move marks a shift in how Washington is treating crypto: the executive branch is acting on its own.
CFTC Chair Michael Selig announced the proposed framework on Monday at the Fordham Law Blockchain Regulatory Symposium. The rules would not cover “ordinary spot crypto exchanges” that are generally regulated under state money transmission laws. Instead, the CFTC would retain authority to enforce anti-fraud and anti-manipulation regulations on spot trading of crypto assets like Bitcoin (BTC).
The Senate vote on the CLARITY Act failed. The act would have given the CFTC more authority over crypto regulations. Instead, the administration has made clear it will proceed without Congress.
The SEC’s August Move
The SEC announced its own “tailored securities offering regime” for crypto assets in August. The two agencies are now working toward a shared approach.
Trump promised to deliver a crypto asset regulatory market structure with or without legislation. Regulators will help him deliver using existing statutory authorities.
“Opponents to CLARITY may have not bargained for the seeming readiness of the executive branch to act in the absence of any constraint from the legislative branch,” said David Tawil, founder of ProChain Capital.
The Regulatory Landscape
The two agencies are now working from similar positions. The CFTC’s proposal would apply to spot trading and retain anti-fraud and anti-manipulation authority. The SEC’s August regime covers securities offerings.
| Agency | Proposed Authority | Target Area |
|---|---|---|
| CFTC | Anti-fraud, anti-manipulation on spot trading | Spot trading of crypto assets |
| SEC | Tailored securities offering regime | Securities offerings |
The move toward a shared regulatory approach raises questions about consistency. The Senate’s failure means the CLARITY Act is dead, and the administration has signaled it will fill the open seats soon.
A Legislative Dead End
The CLARITY Act was designed to give the CFTC more authority over crypto regulations. The Senate vote failed, leaving the act dead.
The administration has responded by telling regulators to act under existing law. The message from the White House is straightforward: the president intends to nominate commissioners to both agencies “in the near future,” according to a White House official who spoke to Cointelegraph last week.
As of Monday, no replacements for Peirce or the other six commissioner seats had been announced. The SEC is operating with two commissioners leading it.
Peirce’s Departure
SEC Commissioner Hester Peirce’s last day was Friday, ending eight years of service before the 18-month extension for her second term. Her departure leaves two commissioners leading the SEC.
Selig is now the sole commissioner and chair heading the CFTC.
The two agencies are now operating with reduced leadership. Trump has promised to nominate commissioners, but no timeline or names have been given.
What This Means for Crypto
The regulatory shift is real. The question is whether it will be consistent.
The Senate has not acted. The agencies are moving forward.
Where the paper stands
The paper backs small crypto businesses and is against the CFTC’s proposed rules, which could raise the cost of entry for them while protecting bigger firms. That is the whole of it.
The CFTC’s move follows the SEC’s August announcement of a tailored securities offering regime. Both agencies are now working toward a shared approach. The Senate’s failure to pass the Digital Asset Market Clarity (CLARITY) Act left that path open, and the administration has filled it with executive action.
Regulation usually protects the biggest players and raises the cost of entry for small ones. The CFTC’s proposal keeps anti-fraud and anti-manipulation authority over spot trading, but it does nothing to lower those costs. The SEC’s August regime covers securities offerings separately. Together, they create a patchwork rather than a single, coherent system.
Source material: “CFTC joins SEC in proposing crypto framework after failed CLARITY vote,” Cointelegraph.
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