The CFTC has moved ahead with crypto regulation on its own, sending a prerule to the White House’s OIRA for review just days after the Clarity Act failed its Senate vote. The agency’s action bypasses a stalled Congress and puts agency rulemaking back in the spotlight as the path forward for digital asset oversight.
The prerule, titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,” was filed this week. Its text has not been made public yet, and OIRA review is a procedural step that comes before any public release. The move signals that the CFTC is ready to act even as the legislative route stalls.
The Failed Senate Vote
The Clarity Act failed its Senate cloture vote this week. The measure needed 60 votes to advance, and it fell short. Lead negotiator Sen. Cynthia Lummis called its chances all but dead this year.
Others have since signaled they intend to push the bill forward despite the shortened legislative calendar with midterm elections on the horizon. That effort faces long odds, and the CFTC’s prerule filing shows the agency is not waiting for it to succeed.
What the Prerule Covers
The prerule title suggests two separate regulations. One covers crypto asset transactions, the other crypto asset markets. Both fall within the CFTC’s jurisdiction as a commodity and futures regulator.
OIRA review is a standard step for major regulatory actions. The CFTC has now handed its proposal to the White House for that review.
The SEC Moves Separately
The SEC issued a new tokenized-stock “innovation exemption” this week, signaling its own path through rulemaking. The CFTC’s move follows a similar pattern of agencies acting independently rather than waiting for a unified legislative outcome.
The two agencies share jurisdiction over some crypto assets, and their separate approaches could create friction down the road. For now, each is moving on its own timeline.
CFTC Relief Already Issued
The CFTC has already granted relief to crypto trading apps. It released no-action relief allowing certain software providers, including crypto wallet apps, to offer users access to regulated derivatives without registering as introducing brokers.
That relief was announced alongside the prerule filing, giving market participants a clearer picture of what the agency expects from software providers in the crypto space. The move shows the CFTC is willing to ease compliance burdens while it builds its broader regulatory framework.
A Bridge Toward Legislation
Regulators have described their rulemaking push as a bridge toward eventual legislation. The idea is that agency rules can establish standards and practices before lawmakers codify them into law.
Treasury Secretary Scott Bessent has previously pointed to agency rulemaking as the fallback if the Clarity Act stalls. His framing makes the CFTC’s move a logical next step.
The Path Forward
The CFTC’s move keeps the regulatory ball in motion. The agency is positioning itself as the primary enforcer of crypto rules until Congress decides whether to act.
For market participants, the practical takeaway is that clarity is coming from regulators, even if Congress does not pass the Clarity Act this year. The CFTC’s prerule process will produce guidance on how crypto asset transactions and markets should operate.
The path forward is now agency-led. The CFTC is doing the work that Congress has not completed.
Key facts box:
– Prerule title: “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets”
– Filed: This week
– Review: OIRA, before public release
– Clarity Act vote: Failed its Senate cloture vote
– Votes needed: 60
– OIRA: White House interagency review
Timeline of recent moves:
1. The Clarity Act fails its Senate cloture vote.
2. Sen. Cynthia Lummis calls its chances all but dead this year.
3. The SEC issues a new tokenized-stock innovation exemption.
4. The CFTC files its prerule with OIRA.
5. The CFTC releases no-action relief for crypto trading apps.
The CFTC’s move shows the agency can move quickly when Congress stalls. The Clarity Act remains stalled, and the CFTC has now shown it can act on its own.
The White House’s OIRA review will determine how soon the prerule becomes public. Until then, the CFTC’s position is clear: it is building its own rulebook, and the industry will have to live with it.
Where the paper stands
The paper backs the small business against the CFTC’s crypto regulation push and is against any new rulebook that raises the cost of entry for small crypto firms, favoring narrow oversight aimed only at direct harm instead. The CFTC’s prerule filing, which sends crypto asset transaction and market regulations to the White House’s OIRA for review, is an exercise of agency power that could reshape the industry without congressional approval.
This is a familiar dynamic: an agency writes a rulebook that the biggest players help shape, while the smallest firms face rising costs and uncertainty. The paper opposes that arrangement wherever it appears, and crypto regulation is no exception.
What the reader should watch for is how this rulebook takes shape. Narrow oversight aimed only at direct harm is one thing; a broad new rulebook that raises the cost of entry for small firms is another. The paper will follow the prerule’s progress closely, paying particular attention to whether the CFTC stays narrowly focused on harm or drifts into territory that favors the largest players in the industry.
Source material: “CFTC Kicks Off Crypto Rulemaking, Bypassing a Stalled Congress,” Decrypt.
Get the Notebook.
The day's best stories and every fresh verdict, in plain English, in your inbox by seven. One email a day, no more.