CFTC Chairman Mike Selig: Will Utilize Existing Legal Powers to Advance Cryptocurrency Market Regulation
According to DEGEN NEWS, Mike Selig, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), stated on September 15 that after the CLARITY Act, aimed at clarifying the regulatory framework for cryptocurrencies, failed to secure enough votes in the Senate, the CFTC will utilize its existing legal powers to advance the formulation of cryptocurrency market rules. Selig said, "The CFTC is ready to introduce its rules for the new financial sector."
The CLARITY Act failed to reach the required 60 votes in a procedural vote in the Senate on September 15, with 50 votes in favor and 49 against, effectively ending congressional efforts for cryptocurrency market structure legislation within 2026. The bill was originally intended to clarify the regulatory boundaries between the Securities and Exchange Commission (SEC) and the CFTC regarding the cryptocurrency market. Several Democratic senators voted against the bill, citing insufficient binding conflict of interest provisions related to Trump's cryptocurrency business and opposition from banking lobby groups regarding stablecoin revenue provisions. Reports indicate that Trump's related cryptocurrency business generated approximately $1.4 billion in revenue in 2025.
Selig emphasized in his statement, "The government previously committed to establishing a forward-looking regulatory market structure for crypto assets, and we will use our existing legal powers to assist in this task. The U.S. is, and will continue to be, the global capital of cryptocurrency." Selig was confirmed by the Senate on December 18, 2025, and sworn in as the 16th Chairman of the CFTC on December 22. He previously served as the chief legal advisor for the SEC's cryptocurrency working group and was a senior advisor to current SEC Chairman Paul Atkins, coordinating the regulatory framework between the SEC and CFTC regarding digital assets.
Almost simultaneously with Selig's statement, his former superior, SEC Chairman Atkins, confirmed that regardless of the Senate vote outcome, the SEC's regulatory reform known as "Project Crypto" will continue to advance. This plan includes three main directions: amending federal securities laws to allow token issuers to raise funds under clear rules, updating the nearly 40-year-old "transfer agent" rules to support tokenized securities infrastructure, and allowing investment advisors to self-custody crypto assets in the absence of qualified third-party custodians, while opening pathways for state trust companies to serve as custodians.
On the day the bill was voted down, the cryptocurrency market reacted sharply, with Bitcoin dropping 2.6% to $42,000 within 24 hours, nearing $76,000; Ethereum fell 3.9%, to a range of $2,397 to $2,407; Solana dropped about 3%; XRP saw the largest decline, down 7.6% to 10%; cryptocurrency-related stocks also plummeted, with Coinbase's stock falling 6.7% to $8, and stablecoin issuer Circle's stock dropping 8% to $11, with forced liquidations of long positions across the crypto market amounting to $570 million.
Responses from industry leaders varied—Ripple CEO Brad Garlinghouse stated, "This really hurts," but acknowledged that SEC Chairman Atkins and CFTC Chairman Selig will continue to push for regulatory development; Enso co-founder Connor Howe reminded that "the vote is where the real determination of regulatory permanence lies—one new chairman can rewrite the rules without a Senate vote"; Cardano Foundation CEO Frederik Gregaard pointed out, "In Europe, builders at least know the rules under the MiCA framework; builders in the U.S. can't wait any longer."
From a funding and expectation perspective, this is a typical policy event-driven sell-off: the market had originally bet that congressional legislation could provide "one-time, bipartisan, and difficult to overturn by a single administrative agency" certainty, but after the legislative failure, it turned to relying on administrative rule-making, precisely because such rules can be easily rewritten by the next chairman, prompting institutional investors to reassess the higher policy uncertainty premium, triggering concentrated short-term liquidations among long positions; however, some institutional investors believe that bypassing the bipartisan tug-of-war in Congress and having Selig and Atkins, former partners in the SEC's cryptocurrency working group, directly lead the administrative rule-making may actually be more lenient towards DeFi and stablecoins than a legislative compromise version, which is also why cryptocurrency stocks and token prices did not experience further unilateral declines after the initial sharp drop. Beneficiaries are crypto-native institutions and market makers advocating for "rapid implementation of regulation from administrative agencies over long legislative battles"; those under pressure are banks and traditional financial institutions that originally relied on congressional legislation for long-term certainty and aimed to expand compliance business layouts, as well as cryptocurrency industry lobbying groups that failed to pass this round and saw their lobbying costs go to waste.
Source: Public Information
ABAB AI Insight
Selig and Atkins are not new partners in promoting cryptocurrency regulation—Selig previously served as the chief legal advisor in the SEC's cryptocurrency working group led by Atkins, where he drafted early proposals for the division of responsibilities between the SEC and CFTC. Now, with Selig as CFTC Chairman and Atkins remaining SEC Chairman, they continue to lead two key regulatory agencies with the same regulatory approach that had already taken shape within the SEC. This strategy of "bypassing congressional gridlock through administrative rules" is not unprecedented—after the Dodd-Frank Act was passed in 2010, then-CFTC Chairman Gary Gensler similarly brought over-the-counter derivatives under regulation through intensive administrative rule-making within the framework of congressional authorization, rather than relying on subsequent standalone legislation. Selig's statement can be seen as a replication of the same regulatory toolbox in the field of crypto assets.
The path of funding and political resource competition is also clear—cryptocurrency companies like Ripple previously invested significant lobbying resources to promote the CLARITY Act, and Garlinghouse's remark that "our team has given everything for this" reflects the industry's hope to lock in certainty through legislation and reduce long-term compliance uncertainty discounts. Now that the legislative pathway is blocked, resources and leverage must shift to lobbying and rule-making hearings at the administrative level, meaning the battleground for influence has shifted from "Congress offices" to "the rule-making comment periods of the SEC and CFTC," changing the structure of lobbying costs—the latter has lower thresholds and relies more on professional legal teams rather than political donations, objectively benefiting crypto companies that already have backgrounds in former regulators and are familiar with administrative procedures.
This contrasts sharply with the cryptocurrency industry's reliance on SEC case enforcement and the "regulation by enforcement" model in the absence of federal legislation during the 2010s—at that time, the industry generally viewed this as a source of regulatory uncertainty and continued to lobby for congressional legislation. Now the roles have reversed, and the industry has begun to welcome the "regulation by rule-making" model, viewing it as a faster and more predictable path than congressional legislation, indicating that the relationship between the cryptocurrency industry and regulatory agencies is transitioning from a confrontational enforcement phase to a consultative rule-making phase. The current position of the industry is to rely on the personal policy inclinations and term stability of the two agency chairs to gain temporary certainty in the absence of one-time legislative certainty—this itself constitutes a new, more fragile source of certainty.
This essentially represents a structural shift of regulatory authority from legislative bodies to administrative agencies—due to the irreconcilable differences between the two parties in the Senate over stablecoin revenue provisions and the President's conflict of interest provisions, the actual decision-making power for rule-making is being transferred from the legislative process requiring 60 votes for bipartisan consensus to the administrative rule-making process that can be completed with a simple majority vote within the agency or even the signature of the chair. While this shift may improve regulatory implementation efficiency in the short term, it also, as noted by Enso's co-founder, degrades regulatory certainty from "bipartisan legislative consensus" to "policy continuity within a single chair's term." Once the next government replaces the CFTC or SEC chair, existing rules may be overturned and rewritten through the same administrative process. Mechanically, as long as Congress remains mired in legislative gridlock due to partisan disputes, administrative agencies will continue to expand their discretionary space under the guise of "existing legal powers," which is both a pragmatic choice to address regulatory vacuums and, in fact, undermines the stability and predictability of regulatory rules themselves.
ABAB News · Cognitive Law
Congress can't produce results, so agencies take action themselves
Legislation provides certainty, administration provides efficiency
A change of chair can rewrite a set of rules