CFTC Chairman Michael Selig has directed agency staff to draft a backup framework for regulating crypto markets in case the Digital Asset Market Clarity Act keeps stalling in the Senate. The plan would let exchanges register under a new "crypto asset market" designation and would also address onchain protocols such as Hyperliquid.
Selig ordered the Commodity Futures Trading Commission staff on Aug. 20 to prepare backup crypto market rules, speaking at the CFTC Innovation Advisory Committee's inaugural meeting in Washington. He said legislation remains his preferred route, but the agency is preparing to use the powers it already holds if Congress does not act.
CFTC Builds a Plan B for Crypto Markets
Selig directed staff to explore rules that would set up a federal market structure for crypto assets without waiting for Congress. The framework could cover existing CFTC registrants as well as cryptocurrency exchanges that currently operate outside the agency's registration system.
Those platforms could register as a specialized type of designated contract market, called a "crypto asset market." The designation could allow platforms to offer leveraged or margined cryptocurrency trading under rules built specifically for those markets. Selig also directed staff to work with developers of onchain finance protocols, including Hyperliquid, on ways they could legally offer their technology in the United States.
Clarity Act Stalls in the Senate
The backup plan comes as the Digital Asset Market Clarity Act struggles to clear Congress. The bill would place spot trading of digital commodities under CFTC oversight, while leaving securities and certain investment contracts under the Securities and Exchange Commission.
So far, the House has passed its version, in 2025, and Senate committees advanced related legislation in 2026. Yet negotiations have since bogged down over government ethics restrictions, stablecoin yields, decentralized finance protections and other policy disputes.
Senate Majority Leader John Thune indicated earlier in August that a vote would not happen before the August recess, pushing consideration into mid-September. Supporters also need 60 votes to overcome a filibuster.
September Becomes the Critical Window
Selig and SEC Chairman Paul Atkins have argued that legislation gives crypto companies more certainty than rules written by agencies, since a federal statute is harder for a future administration to reverse. The CFTC's preparations build on earlier coordination with the SEC, including Project Crypto, an effort to clarify which digital assets fall under each regulator.
If Congress fails to pass the Clarity Act, CFTC rulemaking could offer an interim path for exchanges and developers, but it would carry less permanence and could face court challenges or reversal under a future administration. The agency is now preparing both to implement the Clarity Act if lawmakers deliver it and to move without them if the legislation stalls again.
Source: Bitcoin News
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