Selig Wants Congress Back at the Crypto Negotiating Table as CFTC Advances Its Own Framework

The CLARITY Act remains unfinished business in Washington. CFTC Chairman Michael Selig reportedly wants Congress to reconsider the legislation, even as his agency begins developing a separate framework for parts of the cryptocurrency market using powers it already holds.

For crypto businesses, the practical question is whether that agency process can provide a workable route to federal oversight while lawmakers remain divided.

What Selig said and what has actually changed

In a reported account of his Fox Business remarks, Selig said he would “love to see Congress take up the CLARITY Act once again” in a “form that makes sense,” describing it as “a very large statute.”

Fox Business lists the interview as October 7.

His official remarks two days earlier provide firmer detail about the agency’s position. Speaking at the Fordham Law Blockchain Regulatory Symposium, Selig expressed disappointment that Congress had failed to deliver the legislation to the president. He nevertheless said the CFTC would pursue a crypto market framework under existing statutory authority.

That leaves two policy tracks running alongside one another: Congress can change the governing statute, while regulators can develop rules within the authority the law already gives them.

Why the CLARITY Act still matters

Selig outlined three functions the legislation would have served: putting the securities-versus-nonsecurities boundary into statute, requiring centralized crypto exchanges and brokerages to register with the CFTC, and establishing principles tailored to those registrants.

He also drew an important limit around the agency’s alternative approach: only Congress can mandate that all crypto exchanges register with the Commission.

That distinction matters when reading headlines about a new federal framework. Rules addressing a defined category of transactions do not automatically settle the regulatory position of every exchange, token or business model.

For background on the legislative debate, read Bitnxt’s earlier CLARITY Act explainer covering five key provisions. That article discusses an earlier draft; its provisions should be read in that historical context.

The CFTC’s next step is a consultation

On October 5, the CFTC published an advance notice of proposed rulemaking concerning Regulation Crypto Asset Transactions, or Regulation CTX, and Regulation Crypto Asset Markets, or Regulation CAM.

The consultation concerns retail commodity transactions involving crypto assets under Section 2(c)(2)(D) of the Commodity Exchange Act. The agency is seeking input on preventing abusive practices, adapting compliance requirements to crypto activity and creating a purpose-built subcategory of designated contract market registration.

Comments are due within 60 days of publication in the Federal Register. The agency says those submissions will inform potential future action. This is an early rulemaking stage, rather than an adopted regulatory regime.

Readers following developments across jurisdictions can also explore Bitnxt’s Crypto Laws section.

The exchange model—and customer safeguards—come into focus

Selig described the initial initiative as targeting platforms offering retail crypto trading on a margined, leveraged or financed basis. He distinguished that activity from ordinary spot trading and from futures, options and other derivatives.

Among the safeguards he discussed were market surveillance, controls on conflicts of interest, customer-property protections and a contemplated proof-of-reserves obligation for exchanges holding customer property in omnibus accounts. These remain elements under consideration, rather than newly effective requirements.

For customers, those details are more useful than a broad promise of regulatory clarity. A meaningful framework should make it easier to understand who holds their assets, which entity is responsible for their account and what protections apply to the particular product they are trading.

For businesses, the challenge is operational: a clearer registration route still needs requirements that firms can implement and regulators can supervise.

That relationship between financial infrastructure and legal classification is explored further in Bitnxt’s analysis of why Wall Street is building crypto infrastructure without calling it crypto.

Bitnxt’s view: judge progress by the working rulebook

Bitnxt’s assessment is that the next meaningful milestone will be a framework businesses and customers can actually use.

Congressional legislation could address questions beyond the reach of an agency rule. Meanwhile, a carefully designed CFTC process could clarify obligations for the activities already covered by existing law. The quality of that work will depend on the eventual scope, registration conditions, treatment of customer assets and coordination between regulators.

A chairman’s support for legislation does not establish a congressional timetable. Likewise, opening a consultation does not mean that exchanges have already received a new license to operate.

The developments to watch are the consultation submissions, subsequent proposed rules and any revised legislative text. Those documents will show whether Washington is narrowing the uncertainty—or simply describing it more precisely.

You might also like: Failed CLARITY Act Tokenization Move Risks Offshore Flight, Bitnxt’s related coverage of how legislative delays could affect tokenization businesses and their choice of jurisdiction.