SEC and CFTC Crypto Rules Fall Short of Clarity, Says Hill

House Financial Services Committee Chairman Rep. French Hill stated in an interview with Fox Business that recent crypto rulemaking from the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission "fall[s] short" of the legislative solution required for the industry.

While crediting SEC Chair Paul Atkins and CFTC acting Chair Mike Selig for utilizing regulatory power and exemptive relief to define digital assets and commodities, Hill emphasized that agency rules remain fragile compared with a durable statute. Hill noted the agencies have stepped into the regulatory vacuum following the Senate's 49-50 vote last month to stall the Clarity Act, which aimed to establish rules of the road and clear jurisdictional lines.

Regulatory Actions and Limitations

Recent agency moves include the SEC's rollout of an "innovation exemption" for tokenized stocks alongside proposed custody rules for investment advisers and funds, while the CFTC submitted crypto-markets rulemakings to the White House and proposed federal oversight for crypto exchanges.

However, Hill argued that such relief can be challenged in court or unwound by future administrations. He expressed hope that a permanent law change could pass during the lame-duck session to ensure U.S. leadership in digital assets and blockchain technology.

Key facts

• Rep. French Hill stated that SEC and CFTC crypto rules fall short of a permanent legislative solution.
• The Clarity Act stalled in the Senate in a 49-50 vote last month.
• SEC Chairman Paul Atkins and CFTC Chairman Mike Selig have used exemptive relief to define digital assets.
• Hill authored FIT21 in the previous Congress and the Clarity Act in the current Congress.