CFTC Chairman Michael Selig said Aug. 20 the agency will draft its own crypto market rules if the CLARITY Act keeps stalling, blaming Democratic obstruction. Sen. Ruben Gallego, a Democrat in
Michael Selig, the CFTC chairman, said Thursday the agency will start writing its own rules for crypto asset markets if the CLARITY Act continues to stall in the Senate. He attributed the delay to what he called Democratic obstruction.
If CLARITY continues to stall because of Democratic obstruction, the @CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets. We owe it to the American people to do so.
Here’s how we’ll get it done
pic.twitter.com/mROqraLzFe
— Mike Selig (@ChairmanSelig) August 20, 2026
Selig, confirmed as the CFTC’s 16th chairman in December 2025, framed the move as protecting the industry from the kind of aggressive enforcement he says marked the tenure of former SEC Chair Gary Gensler.
Selig has directed CFTC staff to draft rules that would let exchanges offer leveraged and margined crypto trading under the agency’s oversight, subject to what he called purpose-fit rules. Staff are also exploring a path to designate non-registrant crypto exchanges as a type of designated contract market, or DCM, a status that currently applies to regulated futures exchanges. A third piece of the plan calls for permanent legal protections for the software developers who build the underlying blockchain protocols, so they aren’t held liable for how others use their code.
Selig described the Innovation Advisory Committee itself as a venue built to keep crypto and prediction-market development in the United States rather than losing it to jurisdictions with clearer rules, part of the broader case he’s making for the CFTC to act even without new legislation.
Selig’s account leaves out a detail Sen. Ruben Gallego has been raising for weeks. The Democratic senator, who has been negotiating the bill’s ethics provisions, says the holdup isn’t Democratic resistance to CLARITY itself. It’s an unresolved ethics rule tied to President Trump’s own expanding crypto holdings, and a White House that hasn’t engaged on it.
“We’ve been sending offers over and over again to the White House, and they’ve been coming back either blank,” Gallego said, adding that reaching the 60 votes needed to pass the bill requires “good ethics legislation.”
The Senate has since pushed its vote on the Digital Asset Market Clarity Act to September. Gallego has said the bill’s chances aren’t dead, but they depend on resolving exactly the provision the White House has stayed quiet on. Trump himself agreed in principle to support an ethics provision back in July, but the actual language was never shared with Democrats, which is why Gallego says the offers keep coming back empty a month later.
Selig also used the meeting to escalate a separate jurisdictional fight with New York Attorney General Letitia James over prediction markets, calling her “rogue.” New York is suing Kalshi for $36 billion in damages, alleging the platform let 18- and 19-year-olds trade sports contracts in violation of the state’s betting age limit. That dispute, over whether states can regulate platforms the CFTC already oversees, is playing out in court and is separate from the CLARITY standoff.
Selig isn’t the only regulator making this threat. SEC Chair Paul Atkins told the industry in November that his agency, too, would issue its own crypto rules under a framework he calls Project Crypto if Congress doesn’t act, part of a two-track approach the SEC has been weighing alongside the CLARITY Act for months. Two agency heads making an identical threat, months apart, suggests more than coincidence. Both the CFTC and the SEC appear ready to use the legislative delay, whatever its actual cause, to expand their own authority over crypto markets rather than wait on a bill that depends on the White House resolving its own conflict of interest.
The Senate isn’t expected to vote on CLARITY before September, so whether Selig or Atkins follow through on either threat won’t be tested until the fall. Both are on record saying they will act regardless of what Congress does.
