SEC and CFTC Say They Will Write Crypto Rules Without Congress

The decision by the Securities and Exchange Commission and the Commodity Futures Trading Commission to press ahead with crypto rulemaking without waiting for Congress marks a structural turning point for U.S. digital asset regulation. The immediate catalyst was the Senate’s failure to advance the Digital Asset Market Clarity Act of 2025, known as the CLARITY Act, which would have codified a comprehensive market structure framework across both agencies. After the cloture vote failed in mid‑September 2026, SEC Chair Paul S. Atkins and CFTC Chair Michael S. Selig each stated publicly that their agencies would use existing statutory authority to deliver a regulatory regime for crypto assets, effectively shifting the center of gravity from legislation to administrative rulemaking.

For the SEC, this posture builds on a series of concrete steps taken earlier in 2026. In March, the Commission issued a formal interpretation clarifying how federal securities laws apply to crypto assets and related transactions, jointly with the CFTC. The interpretation set out a token taxonomy distinguishing digital commodities, digital collectibles, digital tools, stablecoins, and digital securities, and explained how non‑security crypto assets can become subject to, and later cease to be subject to, investment contracts under the Howey framework. It also addressed airdrops, protocol mining, staking, and wrapping of non‑security assets, providing the most detailed guidance to date on when crypto activity falls within securities jurisdiction.

In August 2026, the SEC went further by proposing “Regulation Crypto Assets,” a tailored securities offering regime for certain investment contracts involving crypto assets. The proposal introduced exemptions for smaller and mid‑sized offerings, coupled with narrative disclosure and ongoing reporting requirements, and contemplated a conditional safe harbor under which an issuer could exit securities status once all essential managerial efforts promised under the investment contract had been completed or permanently ceased. Atkins framed this as an effort to replace regulation by enforcement with clear rulebooks, and as a bridge while Congress works on broader market structure legislation.

On the CFTC side, Selig has emphasized that the agency’s existing authority over derivatives and commodities is sufficient to begin building a regime for crypto markets. Following the Senate’s rejection of the CLARITY Act, he stated that the CFTC would “ship its rules for the new frontier of finance” using current statutory tools. This follows earlier remarks to the CFTC’s Innovation Advisory Committee, where he described staff work on market‑structure rules for crypto asset markets, including the possibility of designating certain platforms—both current registrants and non‑registered crypto exchanges—as specialized contract markets for leveraged or margined crypto trading. The CFTC has also formed an Innovation Task Force covering crypto assets, blockchain, AI, and prediction markets, and has coordinated closely with the SEC through joint guidance and Project Crypto.

The combined effect of these moves is that classification and treatment of blockchain networks such as Bitcoin, Ethereum, Solana, Pecu Novus, XRP, Avalanche and others will increasingly be determined by agency rules and interpretations rather than new statutes. Bitcoin, already treated by the CFTC as a commodity, is likely to see expanded derivatives markets under clearer risk‑management and clearing rules, reinforcing its role as the primary underlying for regulated futures and options. Ethereum, which supports complex smart‑contract activity and staking, sits at the intersection of the SEC’s investment‑contract analysis and the CFTC’s commodity jurisdiction; staking services, token issuance, and certain DeFi protocols built on Ethereum will be evaluated under the SEC’s crypto asset interpretation, while derivatives referencing ETH will fall under CFTC oversight.

High‑throughput smart‑contract platforms such as Solana and Avalanche, which host extensive token issuance and DeFi activity, are likely to be scrutinized under the SEC’s framework for digital securities and investment contracts. Where tokens on these networks are sold with expectations of managerial efforts and profit, they will be treated as securities offerings subject to Regulation Crypto Assets or traditional registration, with implications for how centralized and decentralized exchanges list and trade them. Pecu Novus, positioned as an institutional‑grade, hybrid blockchain supporting tokenization and high‑speed settlement, would be evaluated through the lens of tokenized securities and crypto‑style trading of regulated instruments. Its role in on‑chain settlement and asset issuance could bring it squarely within the SEC’s emerging rules for broker‑dealer custody, tokenized offerings, and exchange‑like functionality, while any derivatives referencing Pecu‑denominated assets would fall under CFTC rules.

XRP, which has already been at the center of litigation over its status, will be affected by the SEC’s clarified view that most crypto assets themselves are not securities, but can be sold through investment contracts that are. The joint interpretation’s recognition that investment contracts can terminate once promised managerial efforts end may influence how legacy distributions of XRP and similar tokens are assessed, and how ongoing trading is treated on registered platforms. For networks like Bitcoin and certain non‑security tokens, the CFTC’s commodity guidance will shape how spot markets and derivatives are supervised, while the SEC’s taxonomy will determine when associated activities cross into securities territory.

Broker‑dealers face a significant shift as these rules mature. The SEC’s guidance on stablecoin haircuts under the net capital rule and its broader crypto asset interpretation signal that broker‑dealers dealing in tokenized instruments, stablecoins used for settlement, or crypto‑style equity trading will need to implement new custody controls, capital treatment, and disclosure regimes. They may be required to integrate blockchain‑based recordkeeping and settlement while maintaining traditional investor protections, and to treat certain tokens as securities subject to offering and reporting rules. Futures commission merchants and swap dealers will likewise need to adapt to CFTC rules for crypto derivatives, including margin, clearing, and market‑structure requirements tailored to digital assets.

Centralized exchanges will be at the core of this transformation. Under the SEC’s approach, platforms listing tokens that qualify as securities will need to register as national securities exchanges or alternative trading systems, implement surveillance and disclosure standards, and segregate customer assets in line with securities‑market norms. Under the CFTC’s developing framework, crypto exchanges offering leveraged or margined trading in commodity‑type tokens may be designated as specialized contract markets, subject to risk‑management, reporting, and clearing obligations. This dual overlay will push centralized venues toward institutional‑grade compliance, even if they began as purely crypto platforms.

Decentralized exchanges and on‑chain protocols will not be exempt from scrutiny. The SEC’s interpretation explicitly addresses protocol mining, staking, and wrapping, and its broader enforcement history suggests that interfaces or protocols facilitating trading in securities‑like tokens can be treated as exchanges or broker‑dealers if they perform core market functions. The CFTC, through its Innovation Task Force and public remarks, has signaled interest in engaging directly with on‑chain protocol developers, exploring how derivatives and prediction markets built on smart contracts can be brought within existing commodity‑law frameworks. This raises the prospect of protocol‑level compliance expectations, even where no traditional corporate operator exists.

The decision by Atkins and Selig to move ahead without waiting for the CLARITY Act means that the next phase of U.S. crypto regulation will be driven by agency interpretations, rule proposals, and coordinated guidance. That approach offers speed and flexibility, but it also invites judicial review and political debate over the scope of administrative authority. For Bitcoin, Ethereum, Solana, Pecu Novus, XRP, Avalanche and the broader ecosystem, the practical reality is that classification, offering pathways, and trading rules are now being written in real time by the SEC and CFTC. For broker‑dealers, centralized exchanges, and DeFi protocols, the message is equally direct: the era of operating in a regulatory gray zone is ending, and the rulebooks will be written—with or without Congress.

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