The regulator isn't waiting for Congress

The Commodity Futures Trading Commission has sent a new crypto-market proposal to the White House Office of Management and Budget for review.

The move came just days after the Senate failed to advance the CLARITY Act, which was supposed to create a broader statutory framework for US digital-asset markets.

Instead of waiting for Congress to try again, the CFTC is moving ahead using the authority it already has.

CFTC Chair Michael Selig said after the failed Senate vote that the agency was ready to continue developing rules for what he called the "new frontier of finance."

The actual proposal is still secret

There is one important limitation.

The CFTC has not yet published the contents of the proposal.

It is therefore not yet clear exactly which crypto assets it covers, what exchanges would need to do to qualify or how far the agency believes its existing authority extends.

The White House review is also not the final step.

After the Office of Management and Budget reviews the draft, it is expected to return to the CFTC. The commission would then need to vote on the proposal and open it for public comment before any final rule could take effect.

Why the CFTC matters for crypto

The CFTC traditionally regulates US derivatives markets, including futures and swaps.

That already gives it significant authority over parts of the crypto market.

Earlier this year, the CFTC and SEC also adopted joint guidance clarifying how federal securities laws apply to different categories of crypto assets and transactions.

The unresolved question is how much further regulators can go without Congress formally expanding or redefining their responsibilities.

That is one reason the CLARITY Act mattered.

It would have provided a clearer legal division between assets regulated as securities and those falling under commodities law.

Without it, regulators are trying to fill some of the gaps themselves.

The SEC is doing the same thing

The CFTC is not acting alone.

One day before the CFTC proposal became public, the SEC introduced its own five-year exemption allowing qualifying platforms to trade tokenized US stocks on blockchain infrastructure.

Both agencies are therefore advancing digital-asset policy through existing regulatory powers even as Congress struggles to pass comprehensive legislation.

That creates a very different regulatory path.

Instead of one sweeping crypto law defining the market, the US could gradually build its framework through a collection of SEC and CFTC rules, exemptions and interpretations.

Software providers also received relief

The CFTC has already shown what this approach can look like.

On 17 September, agency staff issued a no-action position covering certain passive software providers that connect users directly with regulated derivatives markets.

The relief can apply to software such as crypto-wallet interfaces that allow users to view markets and submit orders to registered firms without the software provider itself registering as an introducing broker.

There are limits.

The software provider cannot take custody of customer assets, generate trading signals or control how orders are executed.

It must also comply with conditions including disclosures, recordkeeping and marketing requirements.

Blockchain is moving into existing regulation too

The CFTC's approach is broader than crypto trading alone.

On 24 September, staff updated guidance confirming that regulated firms can use tokenized versions of permitted investments and blockchain technology for certain recordkeeping requirements.

That is another sign that the agency is increasingly treating blockchain as financial infrastructure rather than something that necessarily requires an entirely separate regulatory system.

But agency rules have limits

Regulators can interpret existing law and create rules within the authority Congress has already given them.

They cannot simply rewrite federal law.

That distinction becomes important if courts, companies or future administrations challenge how aggressively the SEC or CFTC interprets their powers.

A law passed by Congress would provide a more durable foundation.

Agency rules can move faster, but they can also be easier to reverse or challenge.

Why this matters

The failure of the CLARITY Act did not stop US crypto regulation.

It changed who is driving it.

Congress was trying to create one comprehensive market-structure law.

Now the CFTC and SEC are moving forward piece by piece using powers they already have.

For crypto companies, that could mean clearer rules arrive sooner than expected.

But it could also produce a more fragmented system where the boundaries of regulatory authority remain contested.

The next important step is the publication of the CFTC proposal itself.

Until then, we know Washington's regulators are moving.

We just don't yet know exactly how far they intend to go.