CFTC and SEC regulation of the crypto market

[zasad@]

The Senate hearing on the Clarity Act failed on September 15.

SEC
https://x.com/SECPaulSAtkins/status/2100256253645668860
"My thanks go to everyone who put so much effort into the CLARITY Act— across the Administration, Congress, investors, and innovators. Our collective conviction that America must continue to lead is indispensable.

I have been unequivocal: with or without legislation, we will act decisively within the SEC’s statutory authority to deliver certainty for American investors and for the entrepreneurs shaping our technological future."

CFTC
https://x.com/ChairmanSelig/status/2100232064259735589


"The CFTC has submitted a proposal to the White House for the regulation of cryptocurrency transactions and markets. The document is currently in the preliminary stage, and its contents have not been disclosed."
https://www.reginfo.gov/public/do/eoDetails?rrid=1537870

[Curious T]

I kind of expected this. They have been showing signs that they would go ahead and regulate the market in their own way if the bill does pass. It's not like they will do anything different, actually, but they just want the public to think they have it under control. I knew the bill wouldn't pass because there was no support in the Senate. The Democrats didn't get the clause they wanted in the bill, so there was no way they would vote for it. The simple fact that Trump is pushing for the bill is enough for them to be against it.

[zasad@]

I kind of expected this. They have been showing signs that they would go ahead and regulate the market in their own way if the bill does pass. It's not like they will do anything different, actually, but they just want the public to think they have it under control. I knew the bill wouldn't pass because there was no support in the Senate. The Democrats didn't get the clause they wanted in the bill, so there was no way they would vote for it. The simple fact that Trump is pushing for the bill is enough for them to be against it.

The White House review process could take 90 days; subsequently, the bill would be published and public discussions would begin a phase that might take another 90 days.

Things get even more interesting after that: the CFTC will review all comments and issue the final version of the bill.
I won’t list every procedural step here, but the process could drag on until the end of 2027 or even slightly longer.

[Z-tight]

Things get even more interesting after that: the CFTC will review all comments and issue the final version of the bill.
I won’t list every procedural step here, but the process could drag on until the end of 2027 or even slightly longer.

Would these proposed rules by the CFTC need to go through these steps? If i understand correctly, it should not be a regulation like the Clarity Act aiming to be a federal law, so it shouldn't have to go through numerous procedures.

Correct me if i am wrong, but when the CFTC talks about making rules for the crypto market, doesn't it mean they want to use their already existing authority to create rules that would guide their regulation of the market.

[zasad@]

Things get even more interesting after that: the CFTC will review all comments and issue the final version of the bill.
I won’t list every procedural step here, but the process could drag on until the end of 2027 or even slightly longer.

Would these proposed rules by the CFTC need to go through these steps? If i understand correctly, it should not be a regulation like the Clarity Act aiming to be a federal law, so it shouldn't have to go through numerous procedures.

Correct me if i am wrong, but when the CFTC talks about making rules for the crypto market, doesn't it mean they want to use their already existing authority to create rules that would guide their regulation of the market.

Once enacted, a federal law cannot be amended or repealed without undergoing the same complex procedure required for its initial passage.
In contrast, CFTC and SEC rules can be altered by the regulators at their discretion, provided they do not conflict with other laws. This is disadvantageous for investors and businesspeople, as it makes anticipating regulatory risks extremely difficult.

[Z-tight]

Once enacted, a federal law cannot be amended or repealed without undergoing the same complex procedure required for its initial passage.
In contrast, CFTC and SEC rules can be altered by the regulators at their discretion, provided they do not conflict with other laws.

I know this, i understand that official rules by the SEC and CFTC does not have the same 'strength' as a federal law and making alterations to it is somewhat easier. That is not what i am talking about, i am talking about the process of making this law. You claim that it could drag on until the end of 2027, and i am curious why you think so, when it is not a proposed federal law and it shouldn't take that long.

[zasad@]

Once enacted, a federal law cannot be amended or repealed without undergoing the same complex procedure required for its initial passage.
In contrast, CFTC and SEC rules can be altered by the regulators at their discretion, provided they do not conflict with other laws.

I know this, i understand that official rules by the SEC and CFTC does not have the same 'strength' as a federal law and making alterations to it is somewhat easier. That is not what i am talking about, i am talking about the process of making this law. You claim that it could drag on until the end of 2027, and i am curious why you think so, when it is not a proposed federal law and it shouldn't take that long.

As for the lengthy process, the CFTC does not want to look foolish should any loopholes be found in its decisions that would allow companies to engage in foul play. That is why the agency opts for a drawn-out path of approvals and public hearings; this way, if errors do arise, the CFTC will not be held liable for them.

[safar1980]

Frequently Asked Questions on the Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets
(Issued Sept. 25, 2026)
The answers to these frequently asked questions (FAQs) represent the views of the staff of the Division of Corporation Finance. They are not a rule, regulation or statement of the Securities and Exchange Commission. The Commission has neither approved nor disapproved their content. Like all staff guidance, these FAQs have no legal force or effect, do not alter or amend applicable law, and do not create any new or additional obligations for any person.

Unless defined herein, the terms used in these FAQs shall have the meanings ascribed to them in the Interpretive Release issued by the Commission on March 17, 2026.

[zasad@]

Frequently Asked Questions on the Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets
(Issued Sept. 25, 2026)
The answers to these frequently asked questions (FAQs) represent the views of the staff of the Division of Corporation Finance. They are not a rule, regulation or statement of the Securities and Exchange Commission. The Commission has neither approved nor disapproved their content. Like all staff guidance, these FAQs have no legal force or effect, do not alter or amend applicable law, and do not create any new or additional obligations for any person.

Unless defined herein, the terms used in these FAQs shall have the meanings ascribed to them in the Interpretive Release issued by the Commission on March 17, 2026.

This is a very complex text, but as I understand it, the SEC will use its own criteria to determine whether a token is a digital commodity or a security. Given this regulatory environment, it will be extremely difficult for projects to operate without substantial legal support.

[safar1980]

CFTC Looking Ahead

However, in order to embrace innovation, we cannot simply modernize yesterday’s markets. We have to prepare for tomorrow’s.

The work will not be easy, but preparing our markets for the new frontier of finance is imperative. This means readying our markets for mass tokenization, tailoring legacy frameworks so that innovative technologies, such as blockchains and artificial intelligence (“AI”), can be adopted at scale, and ensuring our market participants are prepared for the world of onchain finance and 24/7 markets.

One of the most important innovations is the tokenization of real‑world assets. As I remarked earlier in my tenure as Chairman, high-quality tokenized collateral has the potential to make liquidity more dynamic and markets more resilient.

It is easy to see how using blockchain technology and tokenized assets could become the foundation of a more efficient financial system – a financial system that I suspect many of you believe is long overdue for the 21st century. It is one that enables near‑instantaneous settlement and real‑time collateral mobility across clearinghouses, intermediaries, and end users, all with the attributes of what makes America’s financial markets the gold standard. Just as the transition from hand signals to electronic trading advanced our financial system, I believe tokenization can do the same for all asset classes.

[yhiaali3]

I don't know what the chances are of the law being reintroduced and passed again if it fails under Trump and his pro-Bitcoin and cryptocurrency administration.

But on the other hand, it seems to me that one of the most important reasons for the rejection and failure to pass the law is Trump himself, because the Democrats expressed their concerns regarding the vast financial interests of President Trump's family in crypto, as we all know the enormous profits that Trump and his family have made through the $TRUMP meme And Melania meme And "WLFI".

[zasad@]

I don't know what the chances are of the law being reintroduced and passed again if it fails under Trump and his pro-Bitcoin and cryptocurrency administration.

But on the other hand, it seems to me that one of the most important reasons for the rejection and failure to pass the law is Trump himself, because the Democrats expressed their concerns regarding the vast financial interests of President Trump's family in crypto, as we all know the enormous profits that Trump and his family have made through the $TRUMP meme And Melania meme And "WLFI".

I disagree with that. If Trump sells his trinkets to businessmen from the East who want to have lunch with the US President, there is nothing wrong with that. The main thing is that it doesn't harm the interests of the American economy.

With that kind of power, one could earn far more than a billion dollars. Just look at this-members of Congress have assets worth hundreds of millions of dollars:
https://www.quiverquant.com/congress-live-net-worth/

[yhiaali3]

I don't know what the chances are of the law being reintroduced and passed again if it fails under Trump and his pro-Bitcoin and cryptocurrency administration.

But on the other hand, it seems to me that one of the most important reasons for the rejection and failure to pass the law is Trump himself, because the Democrats expressed their concerns regarding the vast financial interests of President Trump's family in crypto, as we all know the enormous profits that Trump and his family have made through the $TRUMP meme And Melania meme And "WLFI".

I disagree with that. If Trump sells his trinkets to businessmen from the East who want to have lunch with the US President, there is nothing wrong with that. The main thing is that it doesn't harm the interests of the American economy.

With that kind of power, one could earn far more than a billion dollars. Just look at this-members of Congress have assets worth hundreds of millions of dollars:
https://www.quiverquant.com/congress-live-net-worth/

Thanks for the link.
It's no secret that members of Congress have fortunes worth millions of dollars, and I'm sure they have other secret holdings worth hundreds of millions of dollars hidden away that no one knows about.

But for Trump the president of the greatest country in the world to create a meme and sell it for millions of dollars, knowing that it has no value, is something else entirely in my opinion.

I don't know, but I think that the president of any country is supposed to maintain the prestige of the state and not stoop to this low level for the sake of some money.