CFTC files crypto asset rulemaking with White House, pressing ahead without Congress

Key Points:

• The Commodity Futures Trading Commission (CFTC) has submitted its proposed crypto rulemaking, titled "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets," to the White House's Office of Information and Regulatory Affairs for review.
• This move follows the failure of the Clarity Act in the Senate, a bill that aimed to establish comprehensive federal regulation of the digital asset industry but was opposed due to ethics concerns linked to former President Trump's crypto holdings.
• The CFTC is advancing its own regulatory framework using existing authorities, with Chair Michael Selig advocating for the designation of certain crypto exchanges as derivatives clearing organizations (DCMs) under tailored regulatory oversight.
• Concurrently, the Securities and Exchange Commission (SEC) introduced an "innovation exemption" to facilitate onchain trading of tokenized stocks, while the CFTC issued a no-action position protecting software developers from enforcement if they meet specific criteria regarding broker registration.
• These developments indicate federal agencies are proactively shaping crypto market regulations despite legislative setbacks, aiming to provide clarity and oversight in the evolving digital asset landscape.