French Hill Urges Congress to Pass CLARITY Act as SEC and CFTC Step Up Crypto Rulemaking
Key Takeaways
- •The Senate failed last month to pass the CLARITY Act, which would establish a comprehensive market structure for digital assets by separating SEC jurisdiction over securities from CFTC jurisdiction over commodities.
- •Hill argued that SEC and CFTC rulemaking is an inadequate substitute for legislation because agency rules can be revised or rescinded, whereas only new legislation can alter a statute.
- •Hill expressed hope that CLARITY could pass during the lame-duck session, when the Senate has just 22 days in session between the November midterms and the arrival of new lawmakers in 2027.
- •His remarks followed announcements by SEC Chair Paul Atkins and CFTC Chair Michael Selig that they would advance crypto regulation at the direction of President Donald Trump.
- •The SEC and CFTC have seven combined leadership vacancies, with only three of ten authorized commissioner seats filled following SEC Commissioner Hester Peirce's resignation last week.
Representative French Hill, the Arkansas congressman who chairs the House Financial Services Committee, said that while US financial regulators are moving ahead in addressing digital assets, their actions lack the long-term stability that legislation from Congress would provide.
Speaking in a Wednesday interview on Fox Business, the Arkansas lawmaker said the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) had taken steps to address crypto regulation after the US Senate failed last month to pass the Digital Asset Market Clarity (CLARITY) Act. The bill is designed to set a comprehensive market structure for digital assets by drawing clearer jurisdictional lines between the two agencies, distinguishing securities that fall under SEC oversight from commodities under the CFTC’s remit. Both financial agencies have proposed rulemaking to handle different aspects of overseeing and enforcing crypto regulations, but Hill said their response the failed CLARITY vote “[fell] short” of legislative solutions. Agency rulemaking of that kind can be revised or rescinded through future administrative processes, whereas a statute enacted by Congress can only be changed through new legislation — the distinction at the heart of Hill’s argument.
“I still have hope [...] that we can get [CLARITY] passed in the lame duck session of Congress,” said Hill. “We need that permanent law change to make sure America is number one in digital assets and blockchain technology.”
The Arkansas lawmaker’s comments came after the heads of the two regulators — SEC Chair Paul Atkins and CFTC Chair Michael Selig — announced plans to move forward with crypto regulation at the direction of US President Donald Trump.
As Hill noted, the Senate will have only 22 days in session between the US midterm elections in November and the arrival of the next group of lawmakers in Congress in 2027. Election results could influence votes on CLARITY during that lame-duck window, since lawmakers will know whether they are returning to Congress or leaving in January.
Seven leadership vacancies across the SEC and CFTC
As of Wednesday, the SEC and CFTC had a combined seven vacancies at the leadership level. SEC Commissioner Hester Peirce, who led the agency’s Crypto Task Force, announced her resignation last week, leaving only Chair Atkins and Commissioner Mark Uyeda at the agency. At the CFTC, Selig serves as chair and sole commissioner. The SEC is authorized five commissioner seats and the CFTC five, meaning the two market regulators are currently operating with three of ten leadership positions filled between them. Filling the remaining seats requires presidential nomination and Senate confirmation, a process that will proceed alongside the congressional debate over CLARITY.
