Can the CFTC Just Write the Rules Itself?
The CFTC chair said the agency will start building crypto market rules under existing powers if Congress does not pass a law. Nothing has been filed. One question decides the rest: can a regulator write the rules for a market on its own, or does that take an act of Congress?
◷ What it is
A regulatory agency runs on authority handed to it by a law. Congress writes the law; the agency fills in the details with rules. The CFTC already administers the law that covers commodity derivatives, and many crypto products are treated as derivatives. So the agency can write rules under a law it already holds. The argument is about the edges.
Writing rules to apply a law you already administer is like a referee enforcing the rulebook he was handed. Writing rules the law never gave you is like the referee rewriting that rulebook himself. Which of the two this would be is the entire dispute.
⚖ The two readings
The CFTC already holds authority over commodity derivatives under existing law. Crypto products that qualify as derivatives fall inside it. Filling in rules under a statute an agency already administers is ordinary work, done without new legislation every day. On this reading, Congress would help, but is not required.
The existing law was not written for crypto's full market structure, and spot securities remain the SEC's domain. A framework built on stretched authority can be narrowed or struck down in court, and it leaves gaps. On this reading, only Congress can truly assign the jurisdiction, which is what the Clarity Act was drafted to do.
Both rest on real principles: the authority an agency already has, and the limits of that authority. That is why it is contested rather than settled.
☀ What it means for you
- If you build or trade in crypto, the rules you live under may come from one agency's reading of an existing law, not from a statute Congress voted on. The source changes how the rules behave.
- A rule made by an agency alone can be challenged in court and rewritten by the next administration. A law passed by Congress is harder to undo. Where a rule comes from tells you how durable it is.
- Nothing you can do has changed yet. This is a stated intention. Until something is filed, today's rules are still today's rules.
✦ Go deeper → Atlas
- They Announced the Rules. They Wrote Nothing. — Alex Cache reads the announcement itself.
- Who Decides What Counts as a Market — Emma Rowe, on who holds the pen over a market's rules.
Will the plan hold, and on what timeline? That is a probability question, and probabilities are Marc Steiner's desk, not this one.