The Commodity Futures Trading Commission (CFTC) has sent a proposed rule on crypto asset markets to the White House budget office for review, filing it on Thursday, September 17. The move advances the regulatory framework the agency intends to build using powers it already holds under existing law.

The filing came one day after CFTC Chairman Michael Selig said the commission would use its existing statutory authorities to help the president deliver a future-proof regulatory market structure for crypto assets. His comments followed a Senate vote that halted progress on the CLARITY Act, and the new proposal indicates the commission is making good on its chairman's stated plan.

A rulemaking parked at OIRA

The filing, titled "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets," was submitted to the Office of Information and Regulatory Affairs (OIRA). The OIRA sits inside the Office of Management and Budget and vets federal regulations before they can be published. A sign-off from the OIRA would not make the CFTC's submission a final rule, but it is a required step in the process. Under standard federal rulemaking practice, a proposal that clears OIRA review is then published in the Federal Register, opening a public comment period before the agency can move toward a final rule. Executive Order 12866 generally sets a 90-day target for OIRA reviews, with limited extensions.

In an August speech, Selig said he had directed the commission's staff to examine how developers could offer protocols and to draft a framework built on powers the agency already holds. That work, in his words, would "codify a CFTC market structure for crypto assets using the agency's existing authorities." He also described a new type of designated contract market under which registered firms as well as non-registered crypto exchanges could offer leveraged or margined crypto trading under CFTC oversight. Designated contract markets are the CFTC's registration category for trading venues that list futures and options contracts.

Why the CFTC is moving now

The Senate held a cloture vote on the CLARITY Act on Tuesday, September 15. The tally was 49 to 50, leaving the bill eleven votes short of the 60 needed to advance. The legislation would have created the first comprehensive federal framework for digital assets and divided oversight between the CFTC and the Securities and Exchange Commission (SEC). Which regulator oversees which digital asset has been a long-standing source of legal uncertainty for US crypto firms.

The vote does not mark the end of the act, as Senate leaders can still revive it. However, those hoping to see it advance this year may have to wait until next year, as the odds of another vote happening this year are slim.

Democratic negotiators cited ethics concerns in opposing the measure. President Donald Trump's crypto holdings are now estimated to be in the hundreds of millions of dollars, and he has ties to the World Liberty Financial venture, which is run by his sons. Those investments and family connections have raised questions about conflicts of interest as the rule-making process continues.

Three actions in three days

Since the CLARITY Act failed to advance, the CFTC and the SEC have moved ahead with a series of rules and changes. On the same day the CFTC made its OIRA filing, the SEC released its long-awaited "innovation exemption", a five-year conditional order that allows blockchain venues to trade tokenized US stocks without registering as exchanges.

In a staff letter published the same day, the CFTC issued no-action relief for software developers, telling them it would not recommend enforcement against them for failing to register as introducing brokers. Developers must still meet ten conditions covering custody, order routing, and trading signals.

Selig said his commission was "locked in and ready to ship its rules," while SEC Chair Paul Atkins pledged to act "with or without legislation."

A head start, not a statute

The actions the CFTC and SEC have carried out in recent days set a direction for the market, but they are not set in stone, and some carry expirations that could arrive before their stated dates. The SEC's innovation exemption is expected to run for five years, though a future chair could decline to renew it.

The CFTC's no-action letter remains in place until the commission adopts a formal rule. The commission also notes that it is not binding and can be modified, suspended, terminated at its own discretion.

The SEC's Regulation Crypto Assets, the related offering framework, remains a proposal, with comments open until October 20. In late August, the SEC sent a proposal to OIRA aimed at rewriting the rules on crypto custody.