CFTC Chair Selig warns of regulatory control if Clarity Act stalls

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. In an interview with Fox Business, Selig urged lawmakers to advance the crypto market structure bill, which would divide oversight of digital assets between the CFTC and the SEC. The House passed the legislation in July 2025, while the Senate continues negotiating its version. The Senate Banking Committee advanced the measure on May 14, with two Democrats joining Republicans. Selig emphasized the need for a unified framework, stating that the current 'patchwork of state laws and regulations' is detrimental to business. He identified 'mission creep' beyond the bill's core objectives as a major obstacle, particularly Democrats' demands for ethics language related to President Trump and his family. Senate Digital Asset Subcommittee Chair Cynthia Lummis noted that negotiations have been ongoing since last Labor Day, focusing on decentralized finance, illicit finance provisions, and ethics rules. Analysts have lowered expectations for the bill's passage timeline, with Galaxy Research reducing its estimate for Clarity Act passage in 2026 to 50% from 60%. Law enforcement groups expressed concerns over Section 604 of the bill, arguing that protections for non-custodial developers could create oversight gaps.

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