Senate Crypto Bill Gives More Authority to CFTC, Shifting Emphasis From SEC Preferred by House

The United States Senate is moving forward with bipartisan legislation aimed at creating a unified regulatory structure for cryptocurrency markets, though it continues to face challenges in achieving broad agreement across party lines. The proposed Senate measure seeks to define clearer regulatory roles for digital assets, differentiating between securities and commodities, and positions the Commodity Futures Trading Commission (CFTC) as a primary regulator. Currently, the bill is under consideration by the Senate Banking and Agriculture Committees, and is intended to fill regulatory gaps not addressed by the House-approved bill, which is unlikely to pass in its current form due to opposition in the Senate The Clarity Act is Probably Dead: Here's What's Next for Its [ 1 ].

Republican leaders in the Senate, with Chair Tim Scott at the forefront, are advocating for a prompt committee vote on the Banking Committee’s segment of the bill this month, with the Agriculture Committee expected to hold hearings in October. A vote by the full Senate could happen as soon as November, but gaining Democratic support remains crucial. Senator Kirsten Gillibrand and other Democrats have stressed that bipartisan cooperation on specific issues will be necessary to secure the seven Democratic votes needed in addition to the 50 Republican members to move the bill forward Senate seeks to rein in stock tokenization in latest crypto bill draft [ 2 ]. Notably, the draft includes measures to ensure tokenized stocks and similar securities are not classified as commodities, maintaining consistency with existing regulatory practices The Clarity Act is Probably Dead: Here's What's Next for Its [ 1 ].

Significant distinctions between the Senate and House versions reflect the dynamic landscape of crypto regulation. The House’s Clarity Act used a control-based approach to decide whether digital asset transactions are securities, whereas the Senate’s draft introduces an “ancillary asset” model. This model has been revised to reinforce protections for developers of noncustodial software, a change supported by industry advocates. The Senate’s proposal continues to emphasize the CFTC’s regulatory authority, differing from the House bill’s focus on the Securities and Exchange Commission (SEC) Crypto Sprint: Congress and Agencies Move Fast - National Law … [ 3 ].

The timeline for rolling out these regulations is still uncertain. Even with Senate approval before year-end, enacting the law would only initiate a long process of developing detailed rules. Regulatory bodies such as the SEC, CFTC, and FinCEN are expected to take 18 to 24 months to complete rulemaking, which will involve public feedback and engagement with stakeholders, potentially prolonging the process. This extended timeline echoes the slow rollout of the Dodd-Frank Act, highlighting the challenges of adapting the crypto sector to traditional financial oversight The Clarity Act is Probably Dead: Here's What's Next for Its [ 1 ].

This legislative activity comes amid other regulatory changes. Recently, the SEC and CFTC issued joint guidance clarifying that registered exchanges may handle trading of both tokenized securities and non-securities, an effort to better align securities and commodities regulation. The SEC has also revealed plans for a more relaxed regulatory direction in 2025, which includes updating the definition of “dealer” and changing custody regulations, indicating that the government is pursuing both legislative and regulatory reforms Crypto Sprint: Congress and Agencies Move Fast - National Law … [ 3 ].

Opinions among industry participants about the Senate bill remain divided. Supporters believe it would bring much-needed legal clarity and encourage technological advancement, while opponents caution that a bill that differs significantly from the House version could lead to further regulatory fragmentation. The final decision will also shape the influence of agencies like the CFTC in crypto oversight, as the Senate’s approach may increase the CFTC’s power relative to the SEC’s responsibilities The Clarity Act is Probably Dead: Here's What's Next for Its [ 1 ].