CFTC Moves Ahead with Crypto Rules after CLARITY Act Obstacle

By jili tutorial · September 22, 2026

CFTC Advances Crypto Rules After CLARITY Act Stalls: A Detailed Guide to What’s Happening and What It Means

Introduction: A Pivot in Crypto Regulation

Days after the U.S. Senate failed to advance the Digital Asset Market CLARITY Act, the Commodity Futures Trading Commission (CFTC) has taken its own step forward by sending a new rulemaking package on crypto markets to the White House for review. This move signals a shift in strategy: instead of waiting for Congress to resolve a broader legislative deadlock, the CFTC is using its existing authority to craft a dedicated framework for digital assets.

This guide breaks down what happened, why it matters, and what the road ahead looks like for crypto businesses, exchanges, and market participants.

Background: The CLARITY Act and Its Failure

What Was the CLARITY Act?

The Digital Asset Market CLARITY Act was a proposed federal framework designed to:

Define digital commodities and clarify which assets fall under CFTC vs. SEC jurisdiction.
Establish registration requirements for crypto exchanges and custodians.
Resolve conflicts between federal, state, and tribal oversight of digital asset markets.

Why Did It Fail?

On September 15, the Senate held a procedural vote to advance the bill. The result was 49–50—short of the 60 votes needed to proceed. Key points from the debate:

Partisan divisions over investor protections and market oversight.
Concerns about prediction markets and whether federal oversight should replace state or tribal gaming authority.
Lack of consensus on how to harmonize the roles of the SEC and CFTC without creating regulatory gaps.

The Aftermath

The CLARITY Act’s failure left several major questions unanswered:

Which agency oversees which digital assets?
How should leveraged or margined crypto products be regulated?
Can state-licensed crypto exchanges operate across state lines without federal approval?

Without a congressional mandate, the CFTC decided to act on its own.

The CFTC’s New Rulemaking Package: What We Know

The Filing

On September 17, the CFTC submitted a rulemaking package to the Office of Information and Regulatory Affairs (OIRA) at the White House. The official title is:

“Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets.”

At this stage, the proposal is preliminary. The full text is not yet public, as reported by The Block.

Key Details from the OIRA Entry

Designation: Not economically significant under the relevant review criteria.
Legal Deadline: None listed—no mandatory timeline for completion.
Purpose: A starting point for the CFTC to explore rulemaking under its current statutory authority.

What It Does Not Do (Yet)

It does not create a new class of regulated crypto exchanges.
It does not impose immediate compliance obligations on businesses.
It is not a final rule—more review and public comment periods lie ahead.

The Regulatory Process: Step-by-Step

To understand how this filing fits into the bigger picture, here’s the typical path from proposal to enforceable rule:

Internal Drafting – CFTC staff prepare a proposed rule.
OIRA Review – The White House reviews for economic impact and consistency with policy. (Current stage)
Publication & Public Comment – CFTC publishes the proposal in the Federal Register, inviting comments (usually 30–60 days).
Final Rule Drafting – CFTC revises based on feedback.
Second OIRA Review – Another round of White House review.
Final Rule Issuance – Rule takes effect after a specified period.

Since the current filing has no legal deadline, the process could take months or even years. The CFTC has not signaled urgency.

What the CFTC Is Considering: A Crypto-Specific DCM

The Concept of a Designated Contract Market (DCM)

A Designated Contract Market is a CFTC-regulated exchange where futures, options, and other derivatives trade. Currently, a few platforms (like Coinbase, Bakkt) operate DCMs for Bitcoin and Ether futures.

A New DCM for Crypto

CFTC Chairman Michael Selig hinted in August that the agency is exploring:

A new type of DCM tailored specifically for digital assets.
Allowing existing and new crypto exchanges to gain CFTC recognition.
Enabling these platforms to offer leveraged or margined crypto products under rules designed for the sector—not traditional commodities.

Example: Imagine a crypto exchange that wants to offer 3x leveraged Bitcoin trading. Under current rules, that might fall under CFTC authority if structured as a derivative. A crypto-specific DCM would provide a clear, asset-appropriate rulebook for such products.

Why This Matters

Clarity for Exchanges: A dedicated DCM could replace the patchwork of state licenses (e.g., BitLicense) and SEC uncertainty.
Investor Protections: CFTC oversight includes anti-fraud, capital requirements, and customer protection.
Innovation: Tailored rules could encourage new products while managing risk.

The CFTC vs. SEC: A Continuing Tug-of-War

The CFTC’s move comes amid ongoing efforts by other regulators. In March, the CFTC and SEC jointly issued an interpretation on how certain crypto assets would be treated under federal securities laws. However:

The SEC maintains that many tokens (e.g., unregistered offerings) are securities.
The CFTC asserts that Bitcoin, Ether, and other decentralized commodities fall under its authority for derivatives.

Without the CLARITY Act, this boundary remains blurry. The CFTC’s new rulemaking could indirectly define what it considers a “digital asset market” and potentially clash with SEC stances.

Implications for Crypto Businesses: What to Do Now

Immediate Steps

Do monitor the CFTC’s public notice for comment opportunities.
Do engage with legal counsel to assess how a crypto-specific DCM might affect your platform.
Don’t assume any current rules are changing—the filing is early-stage.

Broader Considerations

Prediction Markets: The CLARITY Act debate highlighted concerns about state and tribal-regulated prediction markets (e.g., Kalshi, Polymarket). Without federal clarity, these platforms face uncertainty.
State vs. Federal: Some crypto exchanges operate under state money transmitter licenses. A federal CFTC framework could preempt or complement these.
Legal Permanence: CFTC regulations, unlike legislation, can be reversed or modified by a future administration. Businesses must weigh regulatory risk.

What’s Next? The Road Ahead

OIRA Review – Likely to take several weeks. No public update expected until the review is complete.
Publication – Once OIRA clears, the CFTC must publish the proposal. This is when stakeholders can analyze and comment.
Public Debate – Expect industry groups, consumer advocates, and lawmakers to weigh in.
Potential for Congressionial Action – The CLARITY Act may be reintroduced. Meanwhile, the CFTC’s rulemaking could influence or preempt parts of any future bill.

Key Dates to Watch

No hard deadlines. The earliest a proposed rule could be published is late 2024 or early 2025.
Election year dynamics may slow or accelerate the process.

Key Takeaways

The CFTC is moving forward with crypto rulemaking under its existing authority, bypassing Congress after the CLARITY Act failed.
The September 17 filing is preliminary—no concrete rules yet, and no deadline for action.
A new type of DCM for crypto is on the table, potentially giving exchanges a clear regulatory path for leveraged products.
The rulemaking process is lengthy and multi-step, with public comment opportunities ahead.
For crypto businesses, the message is: prepare, but don’t panic. The regulatory landscape is evolving, but change will not happen overnight.