CFTC Chairman Mike Selig: The U.S. Will No Longer Stand By as Crypto Activities Move Overseas and Standards Are Set by Other Countries; Crypto is Returning Home
Mike Selig, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), stated that the U.S. will no longer stand by as crypto activities move overseas and standards are set by other countries; crypto is returning home, and regulatory clarity will keep it here, led by the U.S.
After Congress failed to pass the Clarity Act, the Commission is using existing authority under the Commodity Exchange Act to advance. On October 5, a notice for proposed rulemaking was published, seeking public comments on retail crypto commodity trading for a 60-day period, covering transactions under Section 2(c)(2)(D) of the Act, and outlining two frameworks: Regulation CTX and Regulation CAM. Selig stated that this is a key step to maintain the U.S. as a global crypto center, with rules designed to prevent fraud like that of FTX before it occurs rather than prosecuting after the fact; he also acknowledged that without Congressional authorization, the Commission lacks the authority to mandate that all platforms must transact in its regulated venues, and that trades, once settled, are generally outside the venue requirements, retaining only anti-fraud and anti-manipulation powers.
On September 17, the Market Participants Division issued Staff Letter 26-25, allowing eligible passive derivatives software developers to connect to regulated markets without registering as introducing brokers. The scope includes event contracts, perpetual contracts, and other regulated derivatives; the software can display market data and positions, send orders directly to registered futures brokers, introducing brokers, and designated contract markets, and can also be embedded in self-custody wallets. This position expands the non-action letter previously granted only to Phantom Technologies in March to similar developers, but does not cover custodial client funds or self-directed orders.
At the U.S. Treasury market conference on September 22, Selig stated that the Commission is preparing for on-chain systems, large-scale tokenization, 24/7 trading, and proxy finance. The Commission has included certain payment stablecoins issued by National Trust Bank as eligible tokenized collateral and is aligning with the GENIUS Act; in May, it also approved the first true Bitcoin perpetual contract on its registered exchange. He also indicated that regardless of whether Congress legislates, the Commission will establish crypto rules using existing authority and will advance Project Crypto with SEC Chairman Paul Atkins to end the mutual obstruction between the two agencies.
This is a shift in regulatory approach, not the implementation of new legislation. Buyers interpret regulatory certainty as a return license for domestic exchanges, stablecoin issuers, and derivatives front-ends; sellers interpret "no mandatory exchange" as offshore platforms still having a moat. Beneficiaries include passive software that can access registered venues, National Trust Bank's stablecoin, and approved perpetual products; those under pressure include offshore contract platforms that rely on regulatory gray areas for fees, and security token issuers still waiting for Congressional delineation.
Source: Public Information
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Mike Selig's path since taking office has been to dismantle the previous administration's approach of replacing rules with enforcement. He publicly described the enforcement-driven approach during Gary Gensler's tenure as pushing the industry overseas, and he rejected the previous Commission's attempt to ban political prediction markets before the 2024 elections. In March 2026, he stated at the Futures Industry Association in Boca Raton that the U.S. is already the global crypto center, and with Paul Atkins, he defined Project Crypto as ending the internal conflict between the two agencies. Two days after the Senate blocked the Clarity Act in September, Staff Letter 26-25 expanded the exemption previously granted only to Phantom into an industry template.
The movement of money is not about subsidies, but about access. Passive front-ends can operate without registering as introducing brokers, but orders must still go to registered futures brokers and designated contract markets, thus fees and margins are flowing back from offshore perpetual markets to U.S. clearing members. Including National Trust Bank's stablecoin as eligible collateral in February was about integrating dollar tokens into derivatives collateral after the GENIUS Act, rather than issuing a new coin. Approving the Bitcoin perpetual contract in May was about bringing historically offshore product structures into the U.S. margin system.
A comparable case is the 1930s Commodity Exchange Act, which brought over-the-counter grain futures into designated contract markets, and the 2010 Dodd-Frank Act, which advanced swaps to central clearing. The industry is in a control phase rather than an expansion phase: products have already been tested overseas, and regulation now needs to decide who can legally take orders. FTX has repeatedly been used by Selig as a negative example to demonstrate that rules must be written in advance, rather than prosecuting after a failure.
At its core, this is about the transfer of pricing power. Offshore platforms previously relied on 24/7 perpetual contracts and loose margins for risk pricing; once passive software can only send orders to registered venues, the spreads, funding fees, and clearing order will be determined by U.S. margin rules. The lack of Congressional legislation does not leave pricing power in a vacuum; the Commission has preemptively claimed the retail commodity crypto and derivatives front-end using existing authority, while the securities boundary remains with the other agency.
ABAB News · Cognitive Law
When Congress is at a standstill, regulation does not stop, it just changes tools.
Exempting the front-end is to lock orders into the clearinghouse.
Standards are not set by inventors, but by those who can enforce clearing.