CLARITY Act Stalls as Two Major US Regulators Join Forces to Advance New Crypto Rules

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4 hours ago

According to Woofun AI, with the Digital Asset Market Clarity Act (CLARITY) suffering a defeat in a congressional vote, the path of US cryptocurrency regulation has undergone a fundamental shift. President Donald Trump has clearly instructed that even without legislative support, regulators must still use existing statutory authority to build market structure. Against this backdrop, the US Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) have broken with convention, joining forces to advance a unified regulatory framework that does not rely on new legislation, aiming to quickly fill the power vacuum created by legislative stagnation. This executive-led regulatory pivot marks the industry's transition from expecting congressional legislation to formally entering the enforcement stage of the game.

CFTC Chairman Michael Selig elaborated on this legislative-bypassing regulatory blueprint on Monday at the Fordham University Law Blockchain Regulation Symposium. He announced that the CFTC has issued a proposed rule notice called "CTX," allowing cryptocurrency companies that provide leveraged or margin trading services to retail clients to choose to operate under the commission's unified national regulation, thereby avoiding the complicated and fragmented money transmission laws of individual states. Data compiled by Woofun AI shows that Selig plans to establish a new "cryptocurrency asset market" category, incorporating it into the designated contract market (DCM) system to provide a compliant registration path for trading platforms. Notably, these new rules explicitly exclude "ordinary spot cryptocurrency exchanges" that are routinely regulated by state law, but for entities providing spot trading services such as Bitcoin (BTC), the CFTC still retains the authority to enforce anti-fraud and anti-market manipulation provisions. Selig emphasized that this move is based on the same statutory authority used by the previous administration, aiming to provide the industry with a clear and predictable compliance path.

Prior to the CFTC's action, the SEC had already launched a "customized securities issuance mechanism" in August, demonstrating the two agencies' determination to coordinate regulatory advancement in the absence of legislation. David Tawil of ProChain Capital pointed out in an article published on Monday that political forces opposing the CLARITY Act may have underestimated the executive branch's willingness and ability to take immediate action in the absence of legislative constraints. This "executive-first" strategy is intended to force the industry to adapt to new compliance standards by strengthening existing agencies' enforcement and rule-making powers, rather than waiting for lengthy congressional debates. Tawil's view reveals the deeper logic of the current regulatory environment: when the legislative process is blocked, regulators tend to expand their jurisdiction by refining existing rules, and this top-down stress test will directly challenge crypto companies' compliance adaptability.

However, the advancement of the regulatory framework faces severe personnel structural challenges. White House officials revealed last week that Trump plans to nominate new commissioners for both agencies "in the near future," but as of Monday, the current administration has not announced any successor list. Hester Peirce left the SEC on Friday after completing eight years of service, departing 18 months before the end of an extended second term. This personnel change has left the SEC currently led by only two commissioners, while the CFTC is entirely led by Selig alone, who serves as both commissioner and chairman. This "hollowed-out" leadership structure has raised internal questions about the legitimacy and enforceability of regulatory decisions. The current administration is attempting to rely on statutory authority to forcibly advance regulatory certainty, but given the severe vacancy in commissioner seats, the long-term stability of its policies and its ability to defend them in court remain highly uncertain.

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