CFTC Chairman Selig says agency will use existing authority for crypto rules if CLARITY Act stalls. CME challenges perpetual futures approval. Legal fights could block the backup plan.
U.S. regulators are preparing to push ahead with crypto market rules if the CLARITY Act remains stuck in Congress. CFTC Chairman Mike Selig told industry participants during a meeting on Aug. 20 that the agency would use its existing powers to establish a regime for crypto asset markets if the legislation stalls.
"We owe it to the American people to do so," Selig said, according to people familiar with the meeting. He said he has instructed CFTC staff to begin drafting rules that would codify the agency's market structure for crypto assets. The move would let the CFTC grant current registrants and onchain protocols a Designated Contract Market license, effectively allowing them to offer leveraged and margin trading in the United States.
President Donald Trump recently confirmed that Hyperliquid, a decentralized exchange, was pursuing that pathway.
The CFTC's threat mirrors recent actions by the Securities and Exchange Commission. The SEC released guidelines for crypto fundraising via initial coin offerings up to $75 million, one of the provisions in the CLARITY Act. For its part, the CFTC wants control over crypto futures, pre-IPO perpetuals, leveraged trading by onchain protocols, GPU futures, and prediction markets.
The agency faces legal challenges on multiple fronts. CME Group, which operates the dominant U.S. futures exchange for bitcoin and ether, is already challenging the CFTC's approval of crypto perpetual futures for Coinbase and Kalshi in court. The agency's authority over prediction markets is also being contested by sports betting firms and state attorneys general. The final verdict on those challenges could depend on the Supreme Court.
Agency-led guidelines that are not codified by Congress can be reversed or blocked by courts, which makes the CFTC's backup plan a temporary fix. White House chief crypto advisor Patrick Witt backed the regulators' plans, calling them "pro-innovation and growth." Coinbase CEO Brian Armstrong said regulatory clarity is coming either way, but the second option comes with its own regulatory risks.
CME Group, which has an Alpha Score of 59 out of 100 from AlphaScala, has a direct interest in the outcome. If the CFTC's plan goes ahead, CME's challenge could shape whether crypto perpetuals and prediction markets stay under the agency's purview or are blocked.
The next concrete date is unclear. The CLARITY Act remains in committee, and Selig's warning suggests the agency is ready to move without it.
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