CFTC Sends Crypto Proposal to White House After CLARITY Fails
The CFTC has sent a crypto proposal for White House review that could create a regulated route for leveraged trading after CLARITY failed in the Senate.
Current status: The draft is undergoing White House review.
What has changed: The CFTC has moved its alternative plan into the federal rulemaking process.
What has not changed: No crypto rules, licenses or customer protections have taken effect.
White House review comes before public release
The CFTC submitted the proposal to the White House Office of Information and Regulatory Affairs, or OIRA, following the Senate vote, according to a September 18 Bloomberg report. The draft itself has not been published.
OIRA reviews major federal proposals before the public sees them. It may clear the draft, request changes or return it to the agency. Clearance would allow the CFTC to continue the process, but it would not make the proposal binding.
The CFTC would still need to approve and publish the text before seeking public comments. According to the agency’s rulemaking guide, proposed rules normally receive a comment period of between 30 and 60 days. A later agency decision would be required before any final requirements took effect.
The CFTC had already placed digital-asset rules on its agenda
The submission follows an earlier rulemaking plan titled “Blockchain and Digital Assets.” Listed as RIN 3038-AF66 in the 2026 Unified Agenda, the item says staff was considering regulatory changes for blockchain-based trading systems and digital assets.
That agenda entry shows that digital-asset rules were already under consideration. Its brief description does not establish that RIN 3038-AF66 is the exact draft now under White House review, so the two records should not be treated as interchangeable until the current submission is published.
Selig previewed the legal approach in August
CFTC Chair Michael Selig had explained what the agency intended to do if Congress did not pass CLARITY four weeks before the Senate vote. In an August 20 address, he said staff had been directed to explore crypto market rules using powers the CFTC already holds.
“The CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets,” Selig said.
His remarks described a possible registration path based on designated contract markets, or DCMs. These are federally regulated exchanges that list futures and other derivatives, monitor trading and enforce market rules.
Selig said existing registrants and some crypto exchanges that are not currently registered could seek designation as a type of DCM called a “crypto asset market.” Approved venues could then offer leveraged or margined crypto trading under requirements written for those products.
The CFTC already regulates derivatives and certain retail commodity transactions financed with leverage or margin. Selig’s remarks focused on that authority; they did not describe comprehensive supervision of fully paid purchases on ordinary crypto spot exchanges.
The CFTC cannot recreate CLARITY through its own rules
The failed CLARITY vote left a wider part of the market outside direct CFTC supervision. The agency can pursue fraud and manipulation involving commodity spot markets, but it does not operate a complete federal registration system for non-security crypto spot exchanges.
| What a CFTC rule may cover | What CLARITY was meant to add |
|---|---|
| Leveraged and margined crypto trading | Broader oversight of non-security spot markets |
| Requirements for CFTC-regulated venues | A statutory division between SEC and CFTC responsibilities |
| A possible registration path for eligible exchanges | Registration categories for digital-commodity intermediaries |
| Rules based on the CFTC’s current mandate | Authority established in federal law |
The CFTC may be able to regulate particular products and venues, but it cannot give itself general authority over non-security spot exchanges. Its rules also cannot determine the legal status of every token or settle every area of overlap with the SEC.
Onchain protocols do not fit neatly into an exchange model
Applying the plan beyond centralized venues creates another problem. A DCM has an identifiable operator that can register, monitor customers and enforce trading rules. An onchain protocol may divide its software, interface, governance, liquidity and transaction settlement among different participants.
Selig said staff would consult protocol developers about lawful ways to offer onchain financial services in the United States. He did not identify which participants would carry the resulting obligations.
The published proposal will need to show whether the CFTC intends to focus on front-end operators, protocol developers, governance bodies, fee-collecting businesses or some combination of them. Until then, the submission should not be read as either approval or prohibition of decentralized finance.
What exchanges and customers should watch next
No platform can rely on the draft until a final rule becomes effective. Once the proposal is public, its practical reach will depend on several provisions:
- Which crypto assets and transactions would qualify.
- Whether any fully funded spot trading would be covered.
- How exchanges would hold and separate customer assets.
- What capital, surveillance and conflict controls would apply.
- Whether offshore platforms could seek US registration.
- How the rules would treat self-custody and onchain software.
Those conditions will show whether major crypto exchanges receive a registration path they can use or whether the proposal mainly adapts derivatives rules for a smaller group of leveraged products.
The published draft will reveal the proposal’s real reach
A workable registration process, custody requirements and defined responsibilities for onchain businesses could bring part of the crypto market under closer federal oversight.
The unresolved question is how much of that market the CFTC can reach without new legislation. If the text remains focused on leveraged trading, the wider spot-market gap left by CLARITY will remain open.
This article is provided for informational purposes only and does not constitute legal, financial or investment advice. The proposal may change during review and rulemaking.
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 5,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
