With comprehensive cryptocurrency legislation at a standstill in the United States, regulators appointed under President Donald Trump are preparing to take the reins of policy-making. However, efforts to craft industry-friendly rules for the digital asset sector are bound to trigger intense battles and could potentially be overturned by a future administration. Over the past several years, well-funded crypto companies have spent hundreds of millions of dollars lobbying for legislation aimed at establishing a solid legal foundation for the industry, but that push has largely ground to a halt, leaving lawmakers with precious little time to reach a deal before the next Congress convenes next year.
The legislative impasse shifts the policy burden onto crypto-friendly regulators within the Trump administration, particularly the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), which are being asked to deliver the regulatory clarity the industry has long complained is missing. According to sources familiar with the matter, the SEC has been simultaneously advancing a rule that would exempt certain token issuances from securities regulations, with the agency expected to push the measure forward in the coming weeks. Meanwhile, the CFTC's website shows that this week it will discuss cryptocurrency regulation and other topics at an industry conference. Miller Whitehouse-Levine, CEO of the Solana Policy Institute, a group focused on advancing digital asset technology policy, said: "Given that Congress is either unwilling or unable to act, regulators appear ready to step in."
The Risk of Regulatory Reversal: Only Congress Can Build a 'Permanent Framework'
Industry experts point out that only Congress can establish a durable and stable regulatory structure. The stalled Clarity Act aims to define which tokens qualify as securities, which as commodities, and which agency bears responsibility for overseeing the sector. Without legislative support, regulatory rules will remain vulnerable to shifts in political winds and judicial challenges, posing long-term risks to the crypto industry. The Trump administration's own sweeping rollback of dozens of SEC and consumer protection agency policies enacted under his Democratic predecessor Joe Biden has vividly highlighted this risk. Some executives even worry that a future administration could appoint a "crypto hawk" like former SEC Chair Gary Gensler to lead the agency. Gensler, during the Biden era, sued dozens of crypto companies, alleging their tokens constituted securities that had not been registered with the agency. Josh Riezman, Chief Legal and Strategy Officer at crypto trading platform GSR, expects the SEC and CFTC to rapidly push forward ambitious rulemaking, which would benefit the industry in the short term. "But under the next administration, depending on how the political landscape evolves, we could easily see a 'Gensler 2.0' scenario," he said. Gensler has previously stated that fraud is rampant in the crypto space and requires aggressive enforcement. Gensler did not respond to requests for comment. A CFTC spokesperson said the Clarity Act is crucial to ensuring U.S. competitiveness and that Congress should seize this opportunity to establish "durable" rules. "If that doesn't happen, the CFTC stands ready to defend America's leadership in financial markets and ensure we remain the global crypto capital."
Democrats Back Rules but Demand Stronger Safeguards
Trump actively courted financial support from the crypto industry during his campaign, and his family has profited from issuing personal tokens. In his second term, he has made crypto reform a priority. His appointed CFTC and SEC leaders quickly reversed Biden-era crypto policies, publicly expressing support for the industry and rescinding related enforcement actions. SEC Chair Paul Atkins has laid out a comprehensive plan to reform capital market rules to accommodate cryptocurrencies. CFTC Chair Michael Selig this year approved bitcoin perpetual futures, a highly leveraged derivatives product. Industry executives anticipate the CFTC will also permit perpetual futures for more crypto assets to be listed. While many Democrats support establishing a regulatory framework for cryptocurrencies, they generally favor stricter anti-money laundering, anti-fraud, and conflict-of-interest safeguards compared to their Republican counterparts. This could become an early hurdle for the SEC and CFTC when crafting rules, as polls suggest Democrats are poised to retake control of the House of Representatives in the November midterm elections, granting them greater oversight authority over regulators.
Industry Resistance Is No Small Matter: Traditional Wall Street Sues the CFTC
Strong opposition from traditional Wall Street institutions to some SEC and CFTC crypto policies could also become a stumbling block to policy implementation. For example, the Chicago Mercantile Exchange (CME) filed a lawsuit in June challenging the CFTC's approval of crypto perpetual futures. According to media reports, the Securities Industry and Financial Markets Association (SIFMA), a major Wall Street trade group, has also urged the SEC to consider imposing restrictions on its plan to allow blockchain-based stock trading. Lawsuits could drag new crypto rules into lengthy judicial proceedings, ultimately enabling a future administration to delay, revise, or abandon these rules, just as Trump's regulators have done to multiple Biden-era financial regulations challenged by the industry. Nevertheless, despite the many obstacles, many crypto industry executives still say "something is better than nothing." Summer Mersinger, CEO of the Blockchain Association and a Republican CFTC commissioner from 2022 to 2025, said: "The fact that regulators are moving forward shows they recognize we can't just sit on our hands and do nothing. This will be helpful, and we appreciate their work. But what we need is something permanent."
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