Michael Selig, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), stated that the Commission is utilizing its existing legal authority to establish a regulatory market structure for crypto assets, declaring that "it’s go time."

This is not a new law from Congress, but rather an administrative legislative approach following the Senate's procedural vote that failed to advance the CLARITY Act. On September 17, the Commission submitted a draft titled "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets" to the Office of Information and Regulatory Affairs at the White House Office of Management and Budget for review, registration number 3038-AF80, which is currently in the pre-rule stage, with the text not yet publicly available. The review under Executive Order 12866 has a limit of about 90 days.

In August, Selig instructed staff at the Innovation Committee to compile a market structure using existing authority, envisioning a new category of crypto asset market similar to designated contract markets, allowing registered and some unregistered exchanges to offer leveraged or margin crypto trading under the Commission's oversight. The path also includes providing compliance channels for protocol developers. The Commission is simultaneously advancing the launch of spot crypto on designated contract markets, tokenized collateral, and stablecoins entering derivatives margin.

Supporting actions have been initiated: a joint explanation with the SEC designating Bitcoin, Ethereum, Solana, XRP, Cardano, etc., as digital commodities rather than securities; launching pilot programs for Bitcoin, Ethereum, and USDC as derivatives margin and issuing no-action letters; approving perpetual contracts as a pathway for futures, leading to a lawsuit from CME; and creating separate rulemaking for prediction markets and event contracts. The GENIUS Act has provided a federal framework for payment stablecoins, while the comprehensive market structure bill remains stalled in Congress.

Selig stated that the White House has committed to clear rules, and after Congressional delays, the agency will no longer wait. He advocates that most crypto assets should be regulated as commodities rather than securities to avoid pushing trading overseas through enforcement instead of legislation. The goal for spot trading was previously included in the 12-month Crypto Sprint by former acting chair Caroline Pham, requiring the presence of spot crypto trading on designated contract markets by the end of the year.

In market mechanics, buyers are paying a premium for compliant exchange and broker licenses, while sellers are benefiting from regulatory arbitrage opportunities in offshore platforms and unregistered leveraged trading. Funds are shifting from gray market spot and perpetual trading to regulated channels accessible to futures commission merchants, clearinghouses, and tokenized treasury collateral. Beneficiaries include Bitnomial and CME system participants with existing DCM and DCO licenses, as well as futures merchants able to accept USDC margin; pressured parties include offshore exchanges unable or unwilling to comply with designated market standards for segregation, reporting, and customer protection, as well as the old enforcement narrative that treats all tokens as securities. The event-driven factor is the administrative response following the failure of Congressional bills.

The draft will only enter formal proposal and public comment after passing White House review, with the rule text, economic significance determination, and final effective date not yet locked in. Submission itself does not equate to rules being in effect.

Source: Public Information