CFTC Forwards Crypto Regulation Framework to White House Following Clarity Act Setback

Key Highlights

• On September 17, the CFTC forwarded a comprehensive crypto market regulation framework to the White House Office of Management and Budget
• Congressional efforts to pass the Clarity Act collapsed earlier that week, prompting federal agencies to utilize their existing regulatory powers
• The SEC introduced an “innovation exemption” providing qualified platforms a five-year runway for onchain tokenized equity trading
• A CFTC no-action letter now permits technology providers to link users with derivatives platforms without broker registration requirements
• Brian Armstrong, CEO of Coinbase, declared that regulatory clarity would arrive “regardless” of the Senate’s decision

Following the Senate’s inability to move forward with the Clarity Act, the CFTC has submitted a comprehensive crypto regulatory framework to the White House for consideration. The submission, documented on September 17, remains in the “prerule” phase—an indication that substantial development work lies ahead. Specifics regarding the regulatory framework remain undisclosed at this time.

Officially designated as “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,” the proposal’s scope regarding covered assets and compliance obligations for trading platforms has not been revealed.

Following White House Office of Management and Budget examination, the framework will return to the CFTC for an initial vote alongside a public commentary period. Implementation would require an additional approval vote.

Congressional Legislative Effort Stalls

Designed to establish nationwide standards for digital asset markets, the Clarity Act failed to gain sufficient support during the September 15 Senate proceedings.

Within 24 hours of the legislative setback, CFTC Chair Michael Selig declared via X that his agency remained “locked in and ready to ship” regulations leveraging current statutory powers. SEC Chair Paul Atkins echoed this commitment, stating his commission would proceed “with or without legislation.”

Selig had telegraphed this approach weeks earlier. During an Innovation Advisory Committee gathering on August 20, he indicated the CFTC stood ready to implement regulations should congressional action falter.

Additionally, he revealed having instructed agency personnel to develop frameworks enabling both registered and unregistered crypto trading venues to achieve “crypto asset market” designation—a specialized contract market category permitting leveraged cryptocurrency trading under CFTC supervision.

SEC Establishes Framework for Tokenized Equity Trading

Coinciding with the CFTC’s White House submission, the SEC unveiled an “innovation exemption” initiative. This provision grants eligible platforms a five-year authorization period for facilitating onchain trading of specified tokenized equities without formal securities exchange registration.

Both regulatory bodies emphasize their collaborative approach to establishing transparent guidelines for the cryptocurrency sector within existing statutory frameworks.

The CFTC simultaneously released a no-action letter on Friday, enabling designated software platforms to facilitate user access to regulated derivatives marketplaces without introducing broker registration.

These platforms may promote particular contracts and receive transaction-dependent compensation. However, they are prohibited from maintaining customer assets, generating trade recommendations, or controlling order execution pathways.

The exemption incorporates requirements including risk disclosure statements and documentation protocols. It remains effective until the CFTC establishes permanent regulations governing software developer activities.

Following the Senate vote, Coinbase CEO Brian Armstrong emphasized that regulatory agencies possess sufficient authority to act independently. “So clarity is coming to crypto regardless,” he posted on X on September 15.

The post CFTC Forwards Crypto Regulation Framework to White House Following Clarity Act Setback appeared first on Blockonomi.