CFTC vacancies slow CLARITY Act amid global crypto competition

A shortage of staff at the Commodity Futures Trading Commission (CFTC) has stalled the Senate’s efforts regarding the Clarity Act, a delay the proponents fear could allow the rest of the world to dictate rules for the crypto industry worth about $2.2 trillion.

In the case of crypto trading firms with a presence across different jurisdictions, the issue is about governance. The Clarity Act indicates that the CFTC would oversee the spot trading of digital commodities. Yet while this agency’s role is supposed to regulate this market, it currently has just one commissioner instead of five – Michael Selig, a Republican. The White House and Senate Democrats were arguing on Thursday, blaming each other for keeping the other four seats vacant.

Selig has been upfront about the stakes involved. In a recent interview with Fox Business, Selig stated that if Congress does not take action, there is a chance that regulators may end up “writing all the rules” for cryptocurrencies. This is what the legislation was intended to avoid: a US market run by regulatory improvisation instead of legislative rules while other countries implement their own rules.

Blame game over CFTC seats

White House officials wrote to Senate Majority Leader John Thune and Senate Minority Leader Charles Schumer on Thursday, saying they wanted to “set the record straight” after Democrats accused the Trump administration of refusing to nominate commissioners to independent agencies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

The allegations were dismissed by the administration. Its argument is that Senate Democrats prevented “every civilian nominee” from being successfully nominated by President Donald Trump, who, as a matter of fact, continues to nominate Democrats to other independent bodies, like the International Trade Commission or the National Labor Relations Board. The letter, signed by Director of Presidential Personnel Dan Scavino and Director of Legislative Affairs James Braid, also said the White House had asked Democratic leaders to recommend candidates for Democratic seats at the SEC and CFTC but received no response.

The officials also cited the Supreme Court’s recent decision in Trump v. Slaughter, arguing that Democratic criticism of the administration’s appointments “were answered by the recent Supreme Court ruling,” which expanded the president’s authority to remove leaders of many independent federal agencies.

Records from the White House prove that the administration withdrew Brian Quintenz’s nomination for chairmanship of the CFTC in September 2025, after which Michael Selig was nominated for the position in October. The White House’s official list of nominations and withdrawals presented to the Senate contains data on these actions, thereby allowing one to see the sequence of events regarding CFTC leadership changes.

Why a half-empty commission matters to the market

According to prior reports, the CFTC is a relatively small organization consisting of only approximately 543 employees compared to the size of the SEC which includes about 4,200 employees. Additionally, it appears the agency has lost 21% of its employees. That being said, lawmakers on both sides of the political aisle have raised the question of whether a single commissioner leading an agency with such small numbers of employees will be able to adequately oversee such a large market that operates 24/7.

The problem does not only relate to the amount of capacity. Glenn Thompson and Angie Craig, House Agriculture Committee leaders, argued in a letter to Trump in May that rules imposed by one person could become easier to challenge in court. Consequently, a full panel of five members has “more durable rules.” Durable rules are crucial to global companies making decisions on where to operate.

Senator Cynthia Lummis articulated her concerns about the timing quite clearly. Enacting the Clarity Act is likely our last chance to get real legislation for digital assets on the books before 2030,” she announced on X this week. She added that if Congress does not do so, then “we are ensuring another country will write the rules for digital assets and we spend the next decade catching up.”

What still stands in the way

The Senate is going to reconvene on July 14 and is likely to proceed with voting. However, there are three important clauses that can slow down the voting process. The first of the clauses offers protections to blockchain developers who don’t have custody over cryptocurrencies. The second is Section 604, which would make certain developers and service providers exempt from having to comply with money-transmitter regulations, a carve-out critics say could weaken anti-money-laundering tools. In turn, the third clause concerns the actions of platforms like Coinbase that can still be paying “rewards” on stablecoin holdings, a practice the GENIUS Act bars issuers from offering directly.

The last match indicates the highest market number working with the bill. According to forecasts made by analysts from Standard Chartered, in 2028 the yield provision of stablecoins will bring about $1 trillion in deposits away from traditional banks. This is the reason why the American Bankers Association turned down the compromise proposal on the language from the White House in March.

The broader market did not react strongly to the standoff on Thursday. The total value of crypto was up by about 1% to nearly $2.2 trillion, with the price of Bitcoin at about $63,773, thanks to stabilizing oil prices. The extent of this calm may change with the decisions the Senate makes after July 14 and whether Trump fills the vacancies that legislators say are necessary for the CFTC to start doing its job.

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