Senate Proposes CFTC Regulation of Bitcoin and Ether Trading

Key Points

Washington — The U.S. Senate is reviewing a bipartisan proposal that would place the Commodity Futures Trading Commission (CFTC) in charge of regulating digital commodities such as Bitcoin and Ether. The measure seeks to establish uniform rules for trading and protect customers in an industry that has operated without clear federal supervision.

The bill, written by Sen. John Boozman (R-Ark.) and Sen. Cory Booker (D-N.J.), directs the CFTC to license and monitor crypto exchanges, brokers, and clearinghouses. Registered firms would operate as Digital Commodity Exchanges (DCEs) under new federal standards for custody, reporting, and trading practices.

“The purpose is to bring order to a market that has been running without consistent rules,” Boozman said. Booker said the proposal ensures customer funds are separated from company accounts and requires more public reporting from crypto firms.

The plan builds on earlier legislation approved by the House of Representatives that gave the CFTC responsibility for the digital commodity market. Together, the bills aim to settle a long-standing dispute over whether digital assets fall under the CFTC or the Securities and Exchange Commission (SEC). Under the new proposal, the SEC would continue to supervise assets that function like securities, while the CFTC would handle spot trading in Bitcoin, Ether, and other non-security tokens.

Debate continues over how the rules should apply to decentralized finance (DeFi) platforms. Supporters of tighter controls want these platforms to follow anti–money laundering requirements similar to banks. Others argue that applying the same rules to decentralized software would be unworkable and could drive developers out of the country.

The CFTC’s ability to carry out the new mandate remains uncertain. The commission currently has one active member. President Donald Trump has nominated Mike Selig to lead the agency, with two Democratic seats still vacant. Boozman said the commission “must be fully staffed and trained” before taking on new duties. Booker agreed that enforcement will depend on whether the agency receives enough funding to manage the workload.

Progress on the legislation has slowed during the ongoing 41-day government shutdown, which has halted most committee activity. A short-term funding vote this week will determine when the Senate resumes debate on the bill.

Crypto exchanges have urged Congress to finalize the measure, arguing that clear federal rules would replace the patchwork of state-level regulations. Coinbase CEO Brian Armstrong said after a recent meeting with senators that most technical details “are already settled,” and that both parties appear ready to move forward.

Sen. Thom Tillis (R-N.C.) warned that Congress has a limited window to vote on the measure before next year’s election schedule limits floor time. SEC Chair Paul Atkins said coordination with the CFTC is already underway to align enforcement and registration requirements.

The White House has asked Congress to deliver the final bill to President Trump by the end of 2025. Supporters hope the measure will finally bring legal clarity to a market worth more than a trillion dollars and end years of regulatory uncertainty around digital assets.

Also Read: CFTC Commissioner Summer Mersinger to Lead Blockchain Association as New CEO