CFTC proposes crypto rules after Clarity Act stalls

The Commodity Futures Trading Commission sent a proposal to the White House on Thursday to regulate crypto transactions and markets. A post on the Office of Management and Budget's website did not make clear what the regulations would contain. The proposal is titled "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets." The move followed lawmakers' failure to advance the long-awaited Clarity Act in a Senate procedural vote on Tuesday. The CFTC and Securities and Exchange Commission have said they would continue crypto rulemaking even without the legislation. CFTC Chair Mike Selig said on Wednesday that the agency would still help U.S. President Trump regulate the crypto sector. Selig called the Senate vote's outcome unfortunate and said the CFTC was ready to issue rules for the new financial sector. Before the vote, Selig had said rulemaking would proceed whether or not the Clarity Act became law, with the aim of finalizing rules before the administration's term ends. Senators approved Selig as the CFTC's chair last year. He was formerly chief counsel at the SEC's Crypto Task Force. White House Crypto and AI Tsar David Sacks described Selig as instrumental in advancing Trump's crypto agenda. Trump campaigned on supporting the crypto sector after regulators under the previous administration brought lawsuits against digital asset businesses, mostly over allegations that they sold unregistered securities. Since Trump became president, the SEC and CFTC have taken a friendlier approach to oversight of the sector. The SEC earlier this week approved trading in tokenized stocks. In August, it also proposed a framework for crypto asset offerings while the legislation remained stalled. Trump urged lawmakers last month to pass the Clarity Act and called it very powerful. Republicans said Democrats were deliberately holding it back. Democrats mainly objected to the bill's ethics provisions. Trump received support from major industry participants during his campaign and after becoming president, while his family has made money from digital asset ventures. Some lawmakers have alleged conflicts of interest, and the White House has denied wrongdoing. A new draft circulated in July that addressed ethics and would ban officials from making money from crypto, but some Democrats said it did not go far enough. The Clarity Act would formally divide oversight among regulators by distinguishing digital assets as securities, commodities or stablecoins.