The CFTC has handed its crypto market proposal to the White House for review, a move that comes as Congress stalls on the Clarity Act. The agency sent the draft to the Office of Management and Budget (OMB) on Thursday, a step that puts the rules on a path toward public comment before they can take effect.
The proposal was submitted after the CLARITY Act failed to advance in the Senate. That bill would have clarified the jurisdiction of the CFTC and the SEC over digital assets, a goal both agencies have pursued since the legislation stalled. Now the CFTC is moving forward on its own, using its existing powers to regulate derivatives and commodity markets.
What the CFTC Has Submitted
The CFTC’s proposal covers crypto markets broadly, though the details remain undisclosed. The agency has not said which crypto assets the rules would cover, which exchanges would need to qualify, what restrictions would apply, or how far it believes its authority extends. Stakeholders are left waiting for more information before they can judge what the rules will actually require.
Once the OMB finishes its review, the draft will return to the CFTC for a vote and public comment. Another vote will follow to make the rules effective. The process is standard for federal rulemaking, but the secrecy around the contents means the industry is operating in a fog.
The SEC Takes Its Own Path
The SEC took a separate route on Thursday, introducing a five-year conditional exemption for qualifying tokenized-stock platforms. The exemption gives those platforms a path to offer onchain trading of certain tokenized stocks without registering as securities exchanges.
The exemption applies to platforms that meet certain criteria. The SEC’s move is a workaround for the same problem the Clarity Act was meant to solve: regulatory uncertainty over digital assets. Both agencies are now using their existing authorities to fill gaps that lawmakers have not addressed.
No-Action Relief for Software Providers
The CFTC also issued no-action relief on Friday, allowing certain passive software providers — including some crypto wallet interfaces — to connect users with regulated derivatives markets without registering as introducing brokers. Providers can market specific contracts and receive transaction-based fees, but they cannot hold customer assets, generate buy or sell signals, or control how orders are routed or executed.
The relief comes with conditions, including risk disclosures, recordkeeping, and compliance with marketing rules. It remains in place until the CFTC adopts rules or guidance addressing registration requirements for software developers.
Both Agencies Vow to Work Together
Both the CFTC and SEC have vowed to continue working together to provide the crypto industry with clearer rules under their existing authority after the Clarity Act failed to pass. The agencies are coordinating their approaches even as they operate independently.
CFTC chair Mike Selig wrote in a post on X following the vote on Wednesday: “The CFTC is locked in and ready to ship its rules for the new frontier of finance.”
What This Means for the Industry
The CFTC’s move is a signal that the agency is determined to regulate crypto markets regardless of whether the Clarity Act becomes law. The SEC’s exemption shows a parallel path for tokenized stocks, which involve securities traded on a blockchain.
Neither approach provides the statutory certainty that advocates pushed for in the Clarity Act. The CFTC is using its existing authority to push forward, while the SEC is taking a narrower exemption approach. Both are acting without a clear mandate from Congress.
| Action | Who Took It | Status |
|---|---|---|
| Crypto market proposal | CFTC | Sent to OMB for review |
| Tokenized-stock exemption | SEC | Introduced Thursday |
| No-action relief for software providers | CFTC | Issued Friday |
| Clarity Act | Congress | Failed to advance in the Senate |
The CFTC’s chair framed the move as ‘locked in and ready to ship,’ but the lack of disclosure leaves stakeholders uncertain about which assets and exchanges are covered and what the rules actually require. The SEC’s exemption applies narrowly to tokenized stocks, while the CFTC’s proposal could reach much further.
Our View
The paper supports a light regulatory touch on technology and a preference for clear statutory authority over agency discretion. Neither of these moves delivers that clarity.
The SEC’s exemption is a sensible workaround for tokenized stocks, but it is narrow and temporary. The CFTC’s proposal, by contrast, is opaque and unannounced, leaving the industry guessing about its scope. Both agencies are acting without the Clarity Act, which would have provided clearer statutory footing.
The CFTC’s proposal is a problem for the industry because it is undisclosed. Stakeholders deserve to know what they are complying with before the rules take effect. The CFTC should disclose the details of its proposal before it votes on it, so the industry can prepare rather than speculate. The SEC’s exemption is a useful stopgap, but it is not a permanent solution.
Until Congress acts, the industry will have to navigate two parallel paths: the CFTC’s undefined rules and the SEC’s tokenized-stock exemption. That is not ideal, but it is where the country is. The paper will continue to watch both developments closely.
Where the paper stands
The paper backs the CFTC’s narrow use of its existing authority to regulate derivatives and commodity markets, and is against a broader expansion of federal oversight that could lock out smaller firms. The CFTC’s proposal, sent to the White House for review after the Clarity Act failed in the Senate, is a move the paper can accept in principle, but the secrecy around its contents raises real concerns.
The SEC’s separate tokenized-stock exemption is a sensible workaround for a similar problem, but it applies only to tokenized stocks and lasts just five years. Neither approach delivers the statutory certainty that advocates pushed for in the Clarity Act.
What the paper wants is transparency. The CFTC should disclose the details of its proposal before voting on it, so the industry can prepare rather than speculate. Until then, the industry will have to navigate two parallel paths: the CFTC’s undefined rules and the SEC’s temporary exemption. That is not ideal, but it is where the country is.
Source material: “CFTC sends crypto rules to White House to review as Congress stalls on Clarity Act,” CoinDesk.
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