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CFTC Readies Crypto Market Rules If CLARITY Bill Fails

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CFTC Readies Crypto Market Rules If CLARITY Bill Fails

2026-08-20 22:15 UTCBy AlphaScala Research DeskSource reporting: CryptopolitanEditorial standards

CFTC Readies Crypto Market Rules If CLARITY Bill Fails

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CFTC Chairman Michael Selig readies a fallback crypto market framework under existing law if Congress cannot pass the CLARITY Act. The plan includes a new DCM type for crypto exchanges

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The Commodity Futures Trading Commission has started drafting a federal crypto market structure it could enforce under existing law if Congress does not pass the CLARITY Act. Chairman Michael S. Selig announced the work Thursday, saying his staff are exploring rules that would bring registered companies and currently unregistered crypto exchanges under a purpose-built CFTC framework.

Selig is also working with SEC Chairman Paul Atkins through Project Crypto on an asset classification system. But the CFTC is not leaving the market in limbo if CLARITY dies on Capitol Hill, he said.

“I’ve directed the CFTC staff to begin exploring rules to codify a CFTC market structure for crypto assets using the agency’s existing authorities,” Selig said. “This could enable current registrants as well as non-registrant crypto exchanges to be designated by the CFTC as a type of DCM known as a crypto asset market.”

That DCM designation would allow margined and leveraged cryptocurrency trades under rules written specifically for those products. The agency already has authority to create new types of designated contract markets, Selig noted.

Selig also directed staff to talk with protocol developers about how onchain finance products could be sold legally in the United States. “Future-proofing developer protections once and for all,” he said.

The chairman said he will give CLARITY time for a congressional vote. “If the Democrats cannot support a bipartisan work product, which reflects compromises from both sides of the aisle, and ultimately send a fair version of the bill to the President’s desk, then rest assured, I will direct CFTC staff to move swiftly to propose these new rules for the industry.”

Agency history and scope

The CFTC was created in 1974 after derivatives markets moved beyond the agricultural contracts covered by older federal laws. Currency contracts, petroleum allocations and Ginnie Mae certificates were among the newer instruments. Congress gave the CFTC “exclusive jurisdiction” over commodity derivatives and a mandate to “promote responsible innovation.” The definition of a commodity was intentionally broad – it could cover physical goods, services, rights, interests, events, and any underlying subject used in derivatives.

Selig tied the current push to that founding principle. “We’ve crossed the Rubicon and are standing at a new frontier of finance. It’s not a question of whether innovations like blockchain, artificial intelligence, and prediction markets will transform our markets. It’s a question of where this innovation will take place and who will write the rules.”

AI compute markets and prediction rule changes

The CFTC is also preparing for financial markets built around AI computing capacity. Selig said spot, forward and derivative markets could develop around GPU clusters to provide pricing and hedging tools. The agency issued a request for comment on compute markets earlier this week and is working with the Department of Commerce.

“Access to advanced GPU clusters and compute capacity increasingly determines who can compete, who can innovate, and ultimately, who can lead,” Selig said.

The agency also proposed changes to CFTC Rule 40.11 for event contracts. The rule would require that such contracts cannot fail to meet core principles or be easily manipulated. War, terrorism, assassination, gaming and criminal acts would get additional consideration, and the CFTC could prohibit them. The problem is that terms like “gaming” and “involve” are not defined in the statute, and the law lacks a fixed test for determining the public interest.

The rulemaking could proceed even without CLARITY, using the CFTC’s existing authorities. Selig’s timeline depends on the legislative calendar; if the bill stalls, staff are ready to move.

This story was first reported by the agency’s official statements and press conference.