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Senate Crypto Legislation Transfers Oversight to CFTC Amid Rising Partisan Debate

Senate Crypto Legislation Transfers Oversight to CFTC Amid Rising Partisan Debate

Bitget-RWA2025/11/20 23:52
By:Bitget-RWA

- U.S. Senate proposes bipartisan bill transferring crypto regulation to CFTC, limiting SEC's role and classifying most cryptocurrencies as commodities. - Trump's CFTC nominee Selig faces scrutiny over agency staffing and bipartisan governance, with Democrats warning of political bias risks under single Republican leadership. - Industry supports CFTC's expanded oversight for regulatory clarity, but critics question its capacity to enforce AML standards and manage crypto market growth. - Finalized framework

The United States Senate has introduced a bipartisan draft bill designed to clarify cryptocurrency regulations, designating the Commodity Futures Trading Commission (CFTC) as the chief federal regulator for digital assets. Senators John Boozman (R-AR) and Cory Booker (D-NJ) presented the proposal, which outlines the CFTC’s responsibilities over crypto spot markets, the classification of digital commodities, and the establishment of market structure guidelines, while

. The draft mirrors the CLARITY Act, which and is currently being reviewed by the Senate.

A key issue in the discussion is the confirmation of Michael Selig, former President Donald Trump’s nominee to head the CFTC. During a Senate Agriculture Committee session, Selig was questioned about his hesitation to pledge additional resources for the agency or to ensure bipartisan representation. At present, the CFTC has only one commissioner, Republican Caroline Pham, who is also acting chair.

that a CFTC composed solely of Trump-appointed officials might lack necessary oversight, especially as the agency’s authority over crypto expands.

The proposed legislation would establish a national regulatory system that treats most cryptocurrencies as commodities, placing them under the CFTC’s supervision. This approach reflects increasing support from both the industry and lawmakers for the CFTC’s expertise in derivatives and global commodities.

that the CFTC’s background in agricultural and energy futures equips it to better manage the volatility and trading patterns of cryptocurrencies, compared to the SEC, which primarily oversees securities. The bill also between the CFTC and SEC for hybrid digital assets, aiming to address longstanding regulatory uncertainty.

Senate Crypto Legislation Transfers Oversight to CFTC Amid Rising Partisan Debate image 0
Nevertheless, Democrats have voiced doubts about whether the CFTC is equipped to oversee the rapidly expanding crypto sector. The agency has experienced staff cuts and a lack of Democratic commissioners since the Trump administration began replacing outgoing members. that a CFTC led exclusively by Republicans could be susceptible to political influence, potentially compromising its independence. Detractors also is adequate to enforce strong anti-money laundering (AML) and consumer protection measures, which are essential in traditional finance.

The future of the bill remains uncertain. The Senate Agriculture Committee, which has oversight of the CFTC, is expected to review the proposal before it proceeds to the full Senate. Meanwhile, Selig’s confirmation hearing is scheduled for Thursday, with a final Senate vote anticipated soon. If approved, Selig would be the sole commissioner,

to direct crypto policy—a prospect that has raised concerns across party lines.

Major players in the crypto industry have largely supported expanding the CFTC’s role, seeing it as a move toward clearer regulation. The bill’s focus on self-custody rights and fewer intermediary requirements has also been positively received by advocates of decentralized finance (DeFi)

. Experts believe that a finalized regulatory framework could speed up institutional participation, as clearer rules for custody and compliance may unlock significant investment .

As discussions progress, the results of these legislative and regulatory efforts will shape whether the U.S. secures its role as a leader in the global crypto market or faces increased division and uncertainty in its digital asset sector.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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