Bipartisan Bill Shifts Crypto Oversight to CFTC to Resolve Regulatory Limbo

The U.S. cryptocurrency landscape is undergoing a pivotal shift as bipartisan lawmakers propose transferring regulatory authority from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC). The draft bill, introduced by Senators John Boozman (R-Ark.) and Cory Booker (D-N.J.), seeks to designate the CFTC as the primary regulator for spot digital commodity markets, framing most crypto assets as commodities rather than securitiesSenators introduce bill to move crypto market regulation from SEC to CFTC. This move aligns with industry demands for clearer oversight and aims to resolve jurisdictional ambiguities that have stymied innovation and investor confidenceUS Senate Releases Crypto Regulation Draft, Potentially Boosting CFTC’s Spot Market Role.

The proposal builds on the House-passed CLARITY Act, which sought to clarify crypto's regulatory framework but stalled during the 40-day government shutdown that began in late OctoberU.S. Government Shutdown Hits 38 Days: Crypto Regulation Stalls as CLARITY Act Freezes. During this period, federal agencies like the SEC and CFTC operated with minimal staffing, halting reviews for crypto ETFs and delaying key legislative progressU.S. Government Shutdown Hits 38 Days: Crypto Regulation Stalls as CLARITY Act Freezes. The shutdown, driven by partisan disputes over healthcare funding, froze economic activity and cost an estimated $10–$30 billion weekly, compounding uncertainty for marketsU.S. Government Shutdown Hits 38 Days: Crypto Regulation Stalls as CLARITY Act Freezes.

As lawmakers near a resolution to end the shutdown, crypto markets have shown signs of recovery. Bitcoin, which had retreated from recent highs amid regulatory limbo, surged above $105,000 following news of a Senate deal to reopen the governmentU.S. Government Shutdown Relief Lifts BTC Above $105k, ETF Outflows Persist. The agreement, which awaits final House approval, has alleviated investor anxiety and spurred a broad rally across digital assets. Tokens like Ethereum (ETH), Solana (SOL), and XRP saw renewed buying interest, with institutional flows and DeFi activity contributing to the reboundCrypto Market Sees Broad Rally as Senate Moves Toward Ending Shutdown.

The Senate's draft bill underscores a growing consensus that the SEC's enforcement-driven approach has hindered crypto's growth. By shifting oversight to the CFTC-a regulator with expertise in commodities-the legislation aims to balance innovation with consumer protectionsUS Senate Releases Crypto Regulation Draft, Potentially Boosting CFTC’s Spot Market Role. Proponents argue the CFTC's experience in markets like oil and gold provides a robust framework for digital assets, while critics warn of potential resource constraintsUS Senate Releases Crypto Regulation Draft, Potentially Boosting CFTC’s Spot Market Role. The bill also mandates expanded CFTC staffing and funding to address the sector's rapid evolutionUS Senate Releases Crypto Regulation Draft, Potentially Boosting CFTC’s Spot Market Role.

Market participants are closely watching how the regulatory realignment interacts with ongoing ETF approvals. The CFTC's role in overseeing spot markets could streamline the path for crypto ETFs, though challenges remain in defining rules for staking services and stablecoinsUS Senate Reaches Deal to End Shutdown: What It Means for Crypto Markets and Upcoming SEC Decisions. With the government shutdown easing and regulatory clarity on the horizon, analysts suggest the sector may see a "buy the dip" rally, particularly if ETF launches gain momentumU.S. Government Shutdown Relief Lifts BTC Above $105k, ETF Outflows Persist.