The failure of the CLARITY Act to pass the Senate has prompted the U.S. Commodity Futures Trading Commission to move forward with establishing cryptocurrency regulations using its current authority.
CFTC Chairman Mike Selig stated that while the agency would have preferred federal legislation codified into statute, it will "go to war with the statute we've got" and use its clear existing authority to regulate the market.
CFTC's Regulatory Approach
The CFTC intends to use its existing powers to establish basic rules and provide clarity for cryptocurrency businesses and market participants. Selig expressed hope that Congress will revisit the CLARITY Act in the future to address remaining regulatory gaps.
Faryar Shirzad, Chief Policy Officer at Coinbase, argued that the proposed CLARITY Act would have strengthened the CFTC's ability to regulate crypto markets by providing additional funding and faster hiring authority. He called on Congress to provide practical support, including resources and staff needed to enforce rules effectively.
Legislative Disagreement
Senator Cynthia Lummis claimed that Democrats opposed the CLARITY Act despite provisions for new regulations. Lummis noted that consumer protection disclosures were added to the bill, but Senate Democrats voted against it.
Recent Regulatory Actions
The CFTC recently updated its FAQs to clarify how tokenization and blockchain technology can operate within existing regulations. The agency also allowed regulated firms to use blockchain for record keeping, provided records remain authentic, accessible, and reliable.
