CFTC Chair Plans Crypto Rules if Clarity Act Fails

CFTC Chair Rostin Behnam told regulators he will prepare new rules for digital assets if Congress does not pass the Clarity Act, positioning the agency to fill gaps in oversight for crypto markets. He presented the potential rulemaking as a response to uncertainty over which federal regulator controls different crypto products.

The draft rulemaking would target trading practices, market surveillance and customer protections on platforms that list crypto tokens. Possible measures include registration and operational standards for trading venues, reporting and recordkeeping duties for intermediaries, and safeguards to limit market manipulation.

Behnam outlined the CFTC’s view that many digital tokens and derivatives tied to them fall within the agency’s commodity jurisdiction. Under that authority, the commission can set standards for exchanges, brokers and other intermediaries that offer products resembling commodities or trade derivatives linked to digital assets.

The chair linked clearer rules to stronger market oversight and investor protections, noting that unclear jurisdiction can leave supervision gaps. He also referenced ongoing enforcement activity by federal agencies aimed at fraud and manipulation in crypto markets, and said the CFTC will coordinate with other regulators where responsibilities overlap.

The Clarity Act, now pending in Congress, seeks to assign primary oversight for tokens, stablecoins and trading platforms among federal agencies. Backers of the bill say it would reduce legal uncertainty for firms and investors by specifying which regulator covers which products. Critics warn it could tilt authority toward one agency’s approach and leave some consumer protections unresolved.

If the CFTC proceeds, formal rule proposals would follow the agency’s notice-and-comment process and could face court challenges, as often occurs with major financial rules. The agency’s actions would focus on areas tied to its commodity and derivatives remit.

Congress has not passed the Clarity Act and its prospects are uncertain. Behnam’s announcement makes clear the CFTC plans to use its existing rulemaking powers if lawmakers do not reach a statutory resolution.