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ZEC $1,292 French Hill Says SEC and CFTC Crypto Rules Fall Short of Clarity
The House Financial Services Committee chair says agency exemptions cannot replace a market-structure law, and he still hopes for a lame-duck vote.
Key takeaways
- The Senate vote was 49-50. The chamber failed to advance the Clarity Act in a 49-50 vote last month.
- The window is narrow. Hill hopes Congress can pass the bill in the lame-duck session before the new Congress begins in 2027.
- Agencies moved instead. The SEC and CFTC pressed ahead with their own crypto initiatives after the Senate vote failed.
What happened
Rep. French Hill said the crypto rulemaking coming from the SEC and CFTC cannot substitute for a market-structure law. Hill, an Arkansas Republican who chairs the House Financial Services Committee, credited the two agencies for stepping in while Congress has not acted.
Speaking to Fox Business, Hill credited SEC Chairman Paul Atkins and CFTC Chairman Mike Selig with using exemptive relief to give definition to digital assets and digital commodities. He then said those policies fall short of what is needed, and that the answer is a legislative solution.
The Clarity Act, which Hill authored in this Congress, would have set the rules of the road for most cryptocurrency activity in the United States and cleared up the jurisdictional lines between the CFTC and the SEC. The Senate failed to advance it in a 49-50 vote last month.
After that vote, the agencies moved ahead on their own. The SEC rolled out an innovation exemption for tokenized stocks and proposed custody rules for investment advisers and funds, while the CFTC sent crypto-markets rulemakings to the White House and floated a plan to bring crypto exchanges under federal oversight.
Why it matters
Hill's central argument is that agency relief does not last. Exemptions and guidance can be challenged in court or unwound by a future administration, whereas a statute is durable.
His comments push back on the view that crypto had stopped waiting on Congress and learned to lean on regulators instead. He said he still holds out hope the Clarity Act can pass in the lame-duck session, arguing that a permanent law change is needed to keep America number one in digital assets and blockchain technology.
Hill hopes Congress can pass the bill in the lame duck session before the new Congress begins in 2027. He told Fox Business that he still has hope and that the bill is needed to ensure America is number one in digital assets.
Background
- Hill wrote FIT21 in the previous Congress and the Clarity Act in this one, and he has consistently framed legislation as the industry's only path to lasting certainty.
- Sen. Cynthia Lummis said Democrats demanded that exchanges prove they can access and transfer customers' private keys, a provision missing from the House version but written into the Senate's CLARITY Act, and then voted no on the bill.
What is still unclear
- Whether a bill that could not clear the Senate weeks ago can be revived before the year's end remains an open question.
- For now, Hill is not ready to hand the job to the regulators.
Questions readers ask
What did French Hill say about SEC and CFTC crypto rules?
He said the agencies' regulatory policies fall short of what is needed and that a legislative solution is required. He credited the two agencies for stepping into the vacuum left by Congress.
Did the Clarity Act pass the Senate?
No. The Senate failed to advance the bill in a 49-50 vote last month. Hill still hopes it can pass in the lame-duck session before the new Congress begins in 2027.
What would the Clarity Act do?
It would set the rules of the road for the majority of cryptocurrency activity in the United States and clear up the jurisdictional lines between the CFTC and the SEC on digital assets.
Why does Hill prefer a law over agency rules?
He says exemptions and guidance can be challenged in court or unwound by a future administration, whereas a statute is durable.
