US crypto legislation is at an impasse, and Trump administration regulators intend to fill the policy vacuum on their own

The Zhitong Finance App learned that as the comprehensive cryptocurrency legislation process in the US comes to a standstill, regulators under US President Trump are preparing to take over the banner of policy formulation. However, efforts to tailor friendly rules for the digital asset industry are bound to trigger a fierce game, and a new administration may overturn them in the future.

Over the past few years, well-funded crypto firms have spent hundreds of millions of dollars lobbying for legislation in an attempt to establish a solid legal foundation for the industry. However, at present, this effort has basically come to a standstill, and there is not much time left for legislators to reach an agreement before the new National Assembly takes office next year.

The legislative impasse has transferred policy pressure to regulators that were friendly to the crypto industry during Trump's tenure, particularly the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), to give the industry regulatory clarity that has long been complained about.

According to people familiar with the matter, the SEC has been simultaneously promoting a rule to exempt some token issuance from securities regulations. It is expected that the agency will push for the implementation of this rule in the next few weeks. Meanwhile, according to the CFTC's official website, the agency will discuss topics such as cryptocurrency regulation at an industry conference this week.

Miller Whitehouse-Levine, CEO of the Solana Policy Institute, which focuses on advancing digital asset technology policies, said: “With Congress unwilling or unable to act, regulators seem ready to take action.”

Risk of regulatory reversal: only Congress can build a “permanent framework”

Industry experts pointed out that only the National Assembly can establish a lasting and stable regulatory framework. The Clarity Act (Clarity Act), which is currently at an impasse, aims to define what kind of tokens are securities, what are commodities, and which agency is responsible for regulating the field. Without legislative support, regulatory rules will be vulnerable to changes in political trends and judicial challenges, posing long-term risks to the crypto industry.

The Trump administration's own drastic rescission of dozens of SEC and consumer protection agency policies during the tenure of former Democratic President Joe Biden has fully highlighted this risk.

Some executives are even worried that a “crypto hawk” like former SEC Chairman Gary Gensler (Gary Gensler) may be appointed to head the supervisory authority after the new administration comes to power. Gensler sued dozens of crypto companies during Biden's tenure, accusing their tokens of constituting securities and not registering with the agency.

Josh Riezman, chief legal and strategy officer at crypto trading platform GSR, anticipates that the SEC and CFTC will quickly push for ambitious rules that will benefit the industry in the short term. “But the next administration, depending on how the political landscape evolves at that time, may well face a situation similar to 'Gensler 2.0'.” Gensler has previously stated that fraud is rampant in the crypto sector and strong enforcement is necessary. Gensler did not respond to requests for comment.

A CFTC spokesperson said the Clarification Act is essential to ensure America's competitiveness, and Congress should seize this opportunity to establish “lasting” rules. “If that doesn't happen, the CFTC is ready to defend America's leading position in financial markets and ensure we remain the global crypto capital.”

Democrats support rules but demand stronger guarantees

Trump actively sought financial support from the crypto industry during the election campaign, and his family also profiteed by issuing personal tokens. During his second term, he made crypto reform a priority. Its appointed CFTC and SEC chiefs quickly reversed the Biden-era crypto policy, publicly voiced support for the industry, and rescinded related enforcement actions.

SEC Chairman Paul Atkins (Paul Atkins) has developed a comprehensive plan to reform capital market rules to suit cryptocurrencies. CFTC Chairman Michael Selig (Michael Selig) approved Bitcoin perpetual futures this year — a highly leveraged derivative. Industry executives expect the CFTC will also allow more crypto assets to be listed in perpetual futures.

While many Democrats support establishing a regulatory framework for cryptocurrencies, they generally prefer stricter anti-money laundering, anti-fraud, and conflict of interest prevention measures compared to their Republican peers. This could be an early obstacle to the SEC and CFTC making rules — polls suggest that the Democratic Party is expected to take back control of the House of Representatives in the November midterm elections, thereby gaining greater scrutiny over regulators.

Industry resistance should not be underestimated: traditional Wall Street agencies sue CFTC

Traditional Wall Street institutions' strong opposition to some of the SEC and CFTC's crypto policies may also become a “stumbling block” for policy implementation.

For example, the Chicago Mercantile Exchange (CME) filed a lawsuit in June this year over the CFTC's decision to approve crypto perpetual futures. According to media reports, Wall Street's main industry organization, the Securities Industry and Financial Markets Association (SIFMA), has also urged the SEC to consider imposing restrictions on its plans to allow blockchain-based stock trading.

The lawsuit could drag the new crypto rules into a lengthy judicial process, eventually allowing a future administration to delay, amend, or repeal these rules — just as Trump regulators did with many of the Biden-era financial regulations that were challenged by the industry.

Despite the obstacles, however, many crypto industry executives say “it's better to have than nothing.” Blockchain Association CEO Summer Mersinger (former Republican CFTC member from 2022 to 2025) said: “The fact that regulators are moving forward is a sign that they know we can't stand idly by and do nothing. This will be very helpful, and we appreciate their work. But what we need is something permanent.”