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As sweeping U.S. crypto legislation stalls, President Donald Trump\u2019s regulators are set to fill the void, but efforts to write favorable rules for the digital asset industry \u200bwill be contentious and could be overturned by future administrations.<\/strong><\/p>\n Deep-pocketed crypto companies have spent hundreds of millions of dollars over several years campaigning for legislation they say will put \u200cthem on solid legal ground, but that effort is now stalled, with little time for lawmakers to reach a deal before the new Congress next year.<\/p>\n That impasse has put the onus on Trump\u2019s crypto-friendly regulators, particularly the Securities and Exchange Commission and the Commodity Futures Trading Commission, to give the industry the regulatory clarity it has long argued it lacks.<\/p>\n The SEC has been working in parallel on a rule to exempt certain token offerings from securities rules, which the agency is \u200bexpected to advance in coming weeks. The CFTC, meanwhile, will discuss crypto regulation, among other issues, at an industry gathering this week, its website says.<\/p>\n \u201cThe agencies \u2026 seemingly are ready to \u200bact, given that Congress has been unwilling or unable to do so,\u201d said Miller Whitehouse-Levine, CEO of the Solana Policy Institute, which advocates for policies \u2060to advance digital asset technology.<\/p>\n FEARS OF REGULATORY REVERSAL<\/strong><\/p>\n Still, only Congress can create a lasting framework, industry experts say. The Clarity Act aims to define which tokens qualify as securities versus commodities, and which agencies \u200bhave oversight of the sector. Without legislation, regulations will be vulnerable to the shifting political climate and court challenges, creating lingering hazards for the crypto industry, said executives and analysts.<\/p>\n The Trump administration\u2019s own extensive \u200brollback of dozens of SEC and consumer watchdog policies introduced under former Democratic President Joe Biden has underscored that risk. Josh Riezman, chief legal and strategy officer at crypto trading firm GSR, said he expected the SEC and CFTC to swiftly push \u200bthrough ambitious rules, which will be helpful to the industry in the short term.<\/p>\n \u201cBut then the next administration, depending on how that shakes out, we can be looking very much like a potentially \u200bGensler 2.0 type scenario,\u201d he added.<\/p>\n Gensler, who said that the prevalence of fraud within the crypto sector necessitated tough enforcement, did not respond to an email seeking comment.<\/p>\n A CFTC spokesperson said the Clarity Act is crucial to ensuring \u200cAmerican competitiveness, \u2060and that Congress should take this opportunity to set \u201cdurable\u201d rules.<\/p>\n \u201cIf that doesn\u2019t happen, the CFTC stands ready to protect America\u2019s leadership in financial markets and ensure we remain the crypto capital of the world,\u201d the spokesperson said.<\/p>\n DEMOCRATS SUPPORT RULES BUT WANT TOUGH SAFEGUARDS<\/strong><\/p>\n Trump, who courted crypto cash on the campaign trail and whose family has profited from its own token, has prioritized crypto reform in his second administration. His CFTC and SEC appointees swiftly reversed Biden-era crypto policies, voicing support for the industry and pulling enforcement actions.<\/p>\n SEC Chair Paul Atkins has laid out sweeping plans to overhaul capital markets rules to accommodate cryptocurrencies, while CFTC Chair \u200bMichael Selig this year approved perpetual bitcoin futures, highly leveraged \u200bderivatives products. Industry executives expect the CFTC \u2060will allow more perpetual futures for additional assets.<\/p>\n While many Democrats support creating a regulatory framework for cryptocurrencies, they generally favor tougher safeguards against money laundering, fraud and conflicts of interest than Republican lawmakers. INDUSTRY CHALLENGES MOUNT<\/strong><\/p>\n Traditional Wall Street firms that strongly oppose \u200bsome SEC and CFTC crypto \u2060policies could also throw sand in the gears.<\/p>\n The CME Group, for example, sued the CFTC in June over its decision to approve perpetual crypto futures, while the Securities Industry and Financial Markets Association, a major Wall Street group, has urged the SEC to consider restrictions on its plan to allow blockchain-based stock trading, Reuters and other media have reported.<\/p>\n Litigation could tie up new crypto rules in court long enough for a future administration to \u2060delay, rewrite or \u200babandon them, much as Trump\u2019s regulators have done with several Biden-era financial regulations that were challenged by industry.<\/p>\n Even with these expected \u200bobstacles, however, many crypto executives say something is better than nothing at all.<\/p>\n \u201cThe agencies moving forward just shows this recognition of, we can\u2019t just stand by and not do anything,\u201d said Summer Mersinger, CEO of the Blockchain Association, who was a Republican \u200bCFTC commissioner from 2022 to 2025.<\/p>\n \u201cThat\u2019s going to be really helpful and we applaud their work,\u201d she said. \u201cBut we need something permanent.\u201d<\/p>\n<\/div>\n
Some executives even fear that a future administration could install crypto hawks like former SEC Chair Gary Gensler, who under Biden sued dozens of crypto companies, alleging their tokens amounted to securities and that the companies should have registered with the agency.<\/p>\n
That could become an early obstacle for the SEC and CFTC rulemakings, with polls indicating Democrats could regain control of \u200bthe House of Representatives in the November midterm elections, giving them greater power to scrutinize the agencies.<\/p>\n