U.S. Commodity Futures Trading Commission Chair Michael Selig warned regulators will end up 'writing all the rules' for digital assets if Congress fails to pass the Clarity Act, as the Senate's legislative window narrows ahead of the August recess following a missed July 4 target. Selig urged lawmakers to advance the crypto market structure bill, which would divide oversight of digital assets between the CFTC and the Securities and Exchange Commission. The ongoing absence of a unified framework has left the industry operating under what Selig described as a 'patchwork of state laws and regulations,' calling federal standards 'absolutely critical' for certainty, clarity, and consumer protection.
Senate Banking Committee Advanced Measure on May 14
The House passed the legislation in July 2025. The Senate Banking Committee advanced the measure on May 14, with two Democrats joining Republicans. Senate Digital Asset Subcommittee Chair Cynthia Lummis said lawmakers have been negotiating the Clarity Act since last Labor Day. Discussions have focused on issues including decentralized finance, illicit finance provisions, and ethics rules, after earlier negotiations over stablecoin provisions sought by banks. Lummis said lawmakers had aimed to release legislative text around the July 4 holiday before moving the bill forward this month.
Democrats Press Ethics Language on Trump Family Crypto Ventures
Selig pointed to 'mission creep' beyond the bill's core objectives as the primary obstacle. Democrats have pressed for ethics language addressing President Trump, his family, and their crypto ventures. Selig characterized this demand as 'derailing this real opportunity to have a bipartisan bill.' In an interview with Fox Business, Selig stated, 'We're so close. We have to get this done. Otherwise, you end up with regulators like me writing all the rules.'
Galaxy Research Cuts Clarity Act Passage Odds to 50%
Analysts have lowered their expectations for the bill's passage timeline. Galaxy Research cut its estimate for Clarity Act passage in 2026 to 50% from 60% in June, citing Senate calendar constraints and a lack of progress in negotiations. TD Cowen said passage before the November midterm election remains 'far from assured' due to unresolved political and policy issues. Law enforcement groups raised concerns over Section 604 of the bill, known as the Blockchain Regulatory Certainty Act, arguing that protections for non-custodial developers could create oversight gaps and complicate investigations into illicit finance.
FAQ
What did CFTC Chair Selig warn about the Clarity Act?
CFTC Chair Michael Selig warned that regulators will end up 'writing all the rules' for digital assets if Congress fails to pass the Clarity Act, as the Senate's legislative window narrows ahead of the August recess following a missed July 4 target.
When did the Senate Banking Committee advance the Clarity Act?
The Senate Banking Committee advanced the Clarity Act on May 14, with two Democrats joining Republicans in support of the measure.
Why have analysts lowered expectations for the Clarity Act passage?
Galaxy Research cut its estimate for Clarity Act passage in 2026 to 50% from 60% in June, citing Senate calendar constraints and a lack of progress in negotiations, while TD Cowen noted unresolved political and policy issues make passage before the November midterm election 'far from assured.'
