CFTC's Independent Phase and Workforce Shortages Raise Worries as CLARITY Act Picks Up Momentum

The U.S. Senate is moving quickly toward a decisive vote on the CLARITY Act, a bipartisan initiative designed to create a unified set of rules for cryptocurrencies. Lawmakers are stressing the importance of regulatory certainty to safeguard consumers and strengthen the U.S.'s position as a leader in digital assets. The bill, which advanced through the Senate Banking Committee led by Chair Tim Scott (R-S.C.), is expected to be considered by both the Banking and Agriculture Committees next month, with the goal of reaching the Senate floor by early 2026

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This legislation seeks to clarify regulatory responsibilities by naming the Commodity Futures Trading Commission (CFTC) as the chief overseer for crypto derivatives and spot trading. The proposal comes after extensive hearings and discussions, with Scott

"enhancing consumer safeguards and establishing the U.S. as a front-runner in financial technology and crypto services." The bill's momentum has been further fueled by the Trump administration's appointment of Michael Selig, a former SEC crypto task force leader, to head the CFTC. During a Senate Agriculture Committee session, Selig highlighted the importance of "straightforward, transparent regulations" to encourage innovation and prevent another crisis like "FTX" .

At Selig's confirmation hearing, the CFTC's crucial function in the proposed regulatory overhaul was a focal point. Legislators questioned whether the agency, with just 543 full-time employees compared to the SEC's 4,200, would need more resources to supervise the fast-changing crypto sector. Selig did not provide details but recognized the necessity for "a system that supports software developers' growth" while maintaining investor security . His comments were in line with the CLARITY Act's objectives, which aim to simplify oversight by consolidating authority within the CFTC instead of dividing it among several agencies.

The Senate Banking Committee's draft, published in November, enjoys support from both parties but still contains unresolved sections that must be harmonized with the Agriculture Committee's version. Scott, who has previously encountered resistance to crypto-related bills, indicated a renewed determination to bridge partisan divides. "We now have a clear route forward," he told Fox Business, emphasizing that the bill's emphasis on market structure and fraud prevention has won wider approval

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At the same time, the possibility of expanding the CFTC's authority has raised concerns across party lines. Sen. Elissa Slotkin (D-Mich.) expressed worries about the agency potentially being led by a "single commissioner" if Selig is confirmed as the only appointee. Slotkin called on Selig to support a balanced commission with members from both parties to prevent "susceptibility to presidential influence"

. Selig, however, stood by the CFTC's mission, asserting that the agency's work is "best accomplished when we incorporate a range of perspectives from wherever they can be found" .

The CLARITY Act could also help resolve ongoing doubts about the CFTC's ability to enforce regulations in a sector known for both innovation and fraud. Selig admitted that stopping manipulation is a challenge, observing that "fraud is limited only by human creativity." Nevertheless, he promised to make enforcement a top priority if confirmed, adding that the agency's new role under the CLARITY Act would create a "clear path" to avoid future disasters

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As both committees advance the bill together, supporters argue that a unified regulatory system is crucial for drawing investment and staying competitive globally. If passed, the legislation would represent a major move toward stabilizing the crypto industry while balancing innovation with oversight.