The Commodity Futures Trading Commission is preparing a fallback framework for cryptocurrency market oversight in case Congress does not advance the Digital Asset Market Clarity Act. CFTC Chairman Michael Selig said at the agency’s Innovation Advisory Committee meeting in Washington that legislation remains his preferred option, but the regulator is ready to act under powers it already has.

Selig said he has instructed agency staff to examine how the CFTC could begin setting up a federal regime for crypto asset markets without waiting for a new law. The move signals that the agency is weighing a parallel path while lawmakers remain deadlocked over the broader bill.

A contingency plan inside the CFTC

According to Selig, the CFTC will move to use its existing authorities if the Clarity Act remains stuck. He framed the agency’s planning as a backup rather than a replacement for legislation, arguing that a statute passed by Congress would still provide a more durable basis for oversight than rules written by regulators alone.

The internal directive calls for staff to explore rules that could extend beyond current CFTC registrants and reach crypto trading venues that do not now operate within the agency’s registration system. In practice, that could amount to a first attempt at a federal market structure for parts of the crypto sector under the commission’s current powers.

How exchanges and onchain protocols could fit

One option under review would let platforms register as a specialized form of designated contract market, or DCM, described as a “crypto asset market.” Under that approach, exchanges could potentially offer leveraged or margined cryptocurrency trading under rules tailored to those products and venues.

Selig also said staff should work with developers of onchain finance protocols on ways their technology could be offered legally in the United States. He specifically pointed to software such as Hyperliquid, highlighting an area where developers have faced years of uncertainty over whether building and publishing such systems could expose them to regulatory liability.

Why Congress remains the preferred route

The Clarity Act would more broadly divide oversight of digital assets between the CFTC and the Securities and Exchange Commission. Under the proposal, spot trading in digital commodities would generally fall under the CFTC, while securities and certain investment contracts would remain with the SEC.

That legislation has made progress but has not cleared Congress. The House passed its version in 2025, and Senate committees advanced related legislation in 2026. Negotiations have slowed over disputes including government ethics restrictions, stablecoin yields, and protections for decentralized finance, along with other policy questions.

September is the next test

Senate Majority Leader John Thune has indicated that the chamber will not vote before the August recess, pushing possible consideration into mid-September. Even then, supporters would still need 60 votes to overcome a filibuster, leaving the bill’s path uncertain.

Selig and SEC Chairman Paul Atkins have both argued that legislation would give crypto companies more certainty because a federal statute is harder for a future administration to reverse. The CFTC’s work also follows earlier coordination with the SEC, including Project Crypto, which is intended to clarify which digital assets fall under each agency and reduce overlapping requirements.

What happens if the bill slips again

For crypto companies, the dispute is not only about agency turf in Washington. Industry participants have long argued that unclear federal rules make it harder to launch products in the United States while other jurisdictions move ahead with more defined regimes.

If Congress does not pass the Clarity Act, CFTC rulemaking could offer an interim route for exchanges and protocol developers seeking a legal path in the US. But that option would come with less permanence than legislation and could still face court challenges or be reversed by a later administration. For now, the next confirmed step is a likely Senate window in September, while the CFTC prepares for either outcome.

Source: news.bitcoin.com