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SEC and CFTC Move to Establish Crypto Regulations Independently of Congress

Following the stall of the CLARITY Act in the Senate, U.S. financial regulators announced separate agency-level frameworks targeting spot exchanges and retail token offerings.

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Following the failure of the CLARITY Act to advance in the Senate with only 50 of the required 60 votes, SEC Chair Paul Atkins and CFTC Chair Michael Selig announced that both agencies will formulate crypto market regulations under their existing regulatory powers.

CFTC Chair Selig directed staff to draft rules establishing a dedicated exchange registration category and frameworks for leveraged retail trading. For Bitcoin, which currently trades on U.S. spot exchanges under state-level money-transmitter licenses, this framework would establish federal CFTC oversight governing operational safeguards, financial reserves, and market integrity, alongside regulated margin trading.

The regulatory initiative also alters oversight for other assets like XRP. A finalized CFTC venue registration would allow spot XRP trading under direct agency monitoring. Meanwhile, the SEC's Regulation Crypto Assets initiative, including an offering rule open for public comment through October 20, intends to provide standardized disclosure procedures for new token distributions rather than relying on enforcement litigation.

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