The U.S. Congress is pushing forward a bill to reform the crypto market, with the core change being the transfer of primary regulatory authority over most spot trading of digital commodities to the Commodity Futures Trading Commission (CFTC). Supporters argue that this will help end the years-long power struggle between the SEC and the CFTC over the regulation of crypto assets; opponents, however, worry that the CFTC's current resources are insufficient to take on the new responsibilities.
Senate committee continues to advance the bill
The bill, titled the "Clarity Act for Digital Asset Markets," also known as the CLARITY Act or H.R. 3633, was passed by the House of Representatives in July 2025, and the Senate Banking Committee advanced the bill on May 14, 2026, demonstrating that bipartisan negotiations on rules governing digital asset markets are ongoing.
Under the proposed legislation, the CFTC will have exclusive regulatory authority over spot trading of digital commodities. Cryptocurrency exchanges, brokers, dealers, and custodians dealing with these assets will all be required to register with the CFTC under the new rules.
Budget and staffing became the focus of the debate.
Brookings Institution researcher Tonantzin Carmona points out that Congress may be entrusting one of the largest new regulatory tasks in financial markets in recent years to an agency with limited budgets and personnel. Her core concern is that while the bill expands the CFTC's responsibilities, it does not simultaneously address the issue of implementation resources.
According to the CFTC's budget documents, the agency had a budget of approximately $365 million for fiscal year 2026, and subsequently requested an increase to $410 million for fiscal year 2027, along with 650 full-time employees. In contrast, the SEC's budget is significantly larger, and the proposed legislation aims to weaken the SEC's regulatory role in many crypto markets, making the resource gap between the two agencies a point of contention.
- The CFTC's fiscal year 2026 budget is approximately $365 million.
- The CFTC has requested a budget of $410 million for fiscal year 2027.
- Requesting a staff of 650 full-time employees
The regulation of the retail spot market is more complex.
One of the key points of contention is that the CFTC has historically regulated derivatives markets such as futures, swaps, and options, where participants are primarily professional institutions and large traders. In contrast, the cryptocurrency spot market has a larger number of retail users, making consumer protection issues more complex.
Critics argue that markets with a high proportion of retail investors are more prone to fraud, manipulation, and investor losses, and that the SEC has historically relied primarily on disclosure, enforcement, and investor education tools to protect retail investors. Even if Congress changes the legal classification of crypto assets, these regulatory capabilities will not automatically transfer to the CFTC.
Asset classification and registration requirements will be adjusted.
According to the proposal, many eligible crypto assets would be classified as "digital goods," thus removing the SEC's control over their trading. If the final rules adopt this classification framework, assets such as Bitcoin, Ethereum, Solana, and XRP could fall into this category.
The bill also requires regulators to finalize the rules within 360 days and sets the effective date for registration requirements at 270 days. For crypto companies, this means a more clearly defined registration path may emerge in the future; however, for regulators, how to complete the system construction within the limited time remains a real problem in the bill's progress.
