Lame-Duck or Lame-Regulators? Hill Says SEC and CFTC Can't Wing Crypto Lawmaking 🪶

Representative French Hill, chair of the House Financial Services Committee, said Wednesday that recent crypto rulemaking by the US Securities and Exchange Commission and the Commodity Futures Trading Commission "fall[s] short" of the long-term stability that only legislation from Congress can provide. In a Fox Business interview, the Arkansas Republican credited SEC Chair Paul Atkins and CFTC Chair Michael Selig for "tak[ing] steps to use their regulatory power, their exemptive relief, to give definition to digital assets and digital commodities, so we can have a functional system here in the U.S. for this innovative form of finance," but argued the approach is inherently fragile. "In my judgement, these regulatory policies fall short of what we have to do, which is have a legislative solution," Hill said, pointing to his authorship of FIT21 in the previous Congress and the Digital Asset Market Clarity (CLARITY) Act in the current one.

Hill's comments come roughly a month after the Senate failed to advance the CLARITY Act in a 49-50 vote, prompting both agencies to press ahead with their own initiatives. The SEC has rolled out an "innovation exemption" for tokenized stocks and proposed new rules governing how investment advisers and funds can custody crypto, while the CFTC has sent crypto-markets rulemakings to the White House and floated a plan to bring crypto exchanges under federal oversight. The actions were taken at the direction of US President Donald Trump, and Hill acknowledged the agencies' efforts even as he insisted only a statute can deliver durable rules. "We need that permanent law change to make sure America is number one in digital assets and blockchain technology," he said.

The Arkansas lawmaker said he still hopes CLARITY can pass during the lame-duck session of Congress, a window of just 22 Senate sitting days between the November midterm elections and the seating of the next Congress in 2027. Hill's remarks followed last week's resignation of SEC Commissioner Hester Peirce, leaving the agency with only Chair Atkins and Commissioner Mark Uyeda, while Selig serves as both chair and sole commissioner at the CFTC, putting the total number of empty leadership-level vacancies across the two agencies at seven as of Wednesday.