Senate Crypto Bill Elevates CFTC Over House’s SEC Focus

The U.S. Senate is advancing efforts to establish a comprehensive regulatory framework for cryptocurrency markets through bipartisan legislation, despite hurdles in achieving cross-party consensus. The Senate’s proposed aims to clarify the regulatory boundaries for digital assets, distinguishing between securities and commodities and designating the Commodity Futures Trading Commission (CFTC) as a key oversight body. The bill, currently under review by the Senate Banking and Agriculture Committees, seeks to address gaps left by the House-passed , which faces uncertain prospects due to Senate resistance to adopting the House version unchanged The Clarity Act is Probably Dead: Here's What's Next for Its^[1].

Senate Republicans, led by Chair Tim Scott, are pushing for a swift committee vote on the Banking Committee’s portion of the bill this month, with Agriculture Committee hearings expected in October. The legislation’s final floor vote could occur as early as November, though Democratic support remains a critical variable. Senate Democrats, including Kirsten Gillibrand, have emphasized the need for bipartisan collaboration on sub-issues to secure the seven Democratic votes required for passage alongside the Senate’s 50 Republican members Senate seeks to rein in stock tokenization in latest crypto bill draft^[2]. The bill’s draft includes provisions to prevent tokenized stocks and other securities from being classified as commodities, a move to align with existing regulatory frameworks The Clarity Act is Probably Dead: Here's What's Next for Its^[1].

Key differences between the Senate and House bills highlight the evolving nature of crypto regulation. While the House’s Clarity Act relied on a control-based test to determine whether digital asset transactions qualify as securities, the Senate’s draft introduces an “ancillary asset” framework. This approach has been modified to enhance protections for noncustodial software developers, a priority advocated by industry groups. The Senate version also retains a focus on CFTC oversight, contrasting with the House bill’s emphasis on the Securities and Exchange Commission (SEC) Crypto Sprint: Congress and Agencies Move Fast - National Law …^[3].

Implementation timelines remain fluid. Even if the Senate bill passes by year-end, the legislative victory would mark only the beginning of a lengthy rulemaking process. Agencies like the SEC, CFTC, and FinCEN will need 18–24 months to draft and finalize regulations, with public comment periods and stakeholder consultations further extending the timeline. This process mirrors the prolonged implementation of the Dodd-Frank Act, underscoring the complexity of integrating crypto into traditional financial systems The Clarity Act is Probably Dead: Here's What's Next for Its^[1].

The legislative push coincides with broader regulatory developments. The SEC and CFTC recently issued joint statements clarifying that registered exchanges can facilitate trading of both tokenized securities and non-securities, a step toward harmonizing securities and commodities laws. Additionally, the SEC has outlined a deregulatory agenda for 2025, including revised definitions of “dealer” and amendments to custody rules, signaling a dual approach of legislative and administrative action Crypto Sprint: Congress and Agencies Move Fast - National Law …^[3].

Industry stakeholders remain divided on the implications of the Senate bill. While proponents argue it would provide much-needed clarity and foster innovation, critics warn of potential fragmentation if the final bill diverges significantly from the House version. The outcome will also influence the role of agencies like the CFTC in shaping the crypto market, with the Senate’s emphasis on commodity oversight likely to elevate the CFTC’s authority at the expense of the SEC’s role The Clarity Act is Probably Dead: Here's What's Next for Its^[1].