November 24: This week in digital asset federal policy
DC Decentralized: A weekly newsletter on digital asset federal policy
This week decoded
As the House and Senate finalize the annual must-pass National Defense Authorization Act (NDAA), one area to watch is the inclusion of language prohibiting the Federal Reserve from considering a central bank digital currency (CBDC). The House included the anti-CBDC provision in its version of the NDAA, but the Senate did not include a similar measure over concerns it would endanger leaders’ ability to garner the required 60 votes for Senate passage.
Senate Agriculture Committee negotiators released its long-anticipated draft of CFTC-focused market structure rules. In addition to providing insight into areas of bipartisan agreement, the discussion draft highlights the many policy areas still under negotiation; bracketed sections illuminated unresolved issues including anti-money laundering controls and decentralized finance.
The nomination of Mike Selig to lead the CFTC is on its way to a full Senate vote, as the Senate Agriculture Committee considered and approved his nomination. Meanwhile, SEC Chair Paul Atkins delivered forward-leaning remarks on the progress of Project Crypto.
The IRS issued guidance allowing investment funds organized as grantor trusts to stake digital assets without violating current investment tax rules, as well as draft instructions for digital asset broker information reporting in 2026, while their proposed rule implementing cross-border digital asset information reporting is under final review.
Read more below
Congress
Hearings
Last week
On November 19, the Senate Agriculture Committee considered the nomination of Michael Selig to be chairman and commissioner of the Commodity Futures Trading Commission (CFTC)
This week
Congress is in recess for the Thanksgiving holiday.
Upcoming
On December 2, the House Financial Services Committee holds a hearing on Oversight of Prudential Regulators.
Legislation
Senate Committee on Agriculture, Nutrition, and Forestry Chair John Boozman (R-AR) and Sen. Cory Booker (D-NJ) released a discussion draft of market structure legislation that would provide new authority to the Commodity Futures Trading Commission (CFTC) to regulate digital commodities. (Text)
Rep. Warren Davidson (R-OH) introduced the Bitcoin for America Act to allow Americans to pay federal taxes in Bitcoin and direct all such payments into the Strategic Bitcoin Reserve. (Press release)
Rep. Steve Cohen (D-TN) introduced The Clean Cloud Act to amend the Clean Air Act to establish requirements on the collection of electricity consumption data and emissions standards for servers and other computing equipment used for cryptocurrency mining. (Text)
Correspondence
Sen. Todd Young (R-IN) sent a letter to Treasury Secretary Scott Bessent urging the IRS revisit their 2023 guidance on the tax treatment of staking rewards, specifically requesting details on how the guidance was developed and asking the IRS to verify if they are reviewing their analysis, per recommendation of the Presidential Working Group on Digital Asset Markets. (Bloomberg)
Sens. Elizabeth Warren (D-MA) and Jack Reed (D-RI) sent a letter to Treasury Secretary Scott Bessent and Attorney General Pamela Bondi requesting information into any efforts to investigate World Liberty Financial (WLF) in light of recent reports that it sold its governance tokens to buyers linked to North Korea, Russia, and other illicit actors. (Letter)
Sens. Chris Murphy (D-CT) and Elizabeth Warren (D-MA) sent a letter to the White House and Office of Government Ethics (OGE) requesting information about inconsistencies in U.S. Special Envoy to the Middle East Steve Witkoff’s ethics disclosure forms, concerns related to a deal that allows the United Arab Emirates (UAE) to acquire U.S.-made AI chips, and potential crypto-related conflicts of interest. (Letter)
Sens. Adam Schiff (D-CA), Ed Markey (D-MA), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA), Peter Welch (D-VT), Raphael Warnock (D-GA), and Richard Blumenthal (D-CT) sent a letter to Federal Energy Regulatory Commission (FERC) Chair Laura Swett urging FERC to ensure that energy demand from data centers does not result in rate hikes for American households, including the question “What steps is the Trump Administration and its partners in the artificial intelligence and cryptocurrency industries taking to compensate American households for drastic increases in their utility bills?” (Letter)
Publications, Events, and Meetings
The House Committee on Ways and Means Majority briefed Republican members on foundational digital asset tax policy, in preparation for a comprehensive crypto tax package. (X.com)
Trump Administration
Securities and Exchange Commission (SEC)
On December 15, the SEC’s Crypto Task Force will host a discussion on financial surveillance and privacy.
Internal Revenue Service (IRS)
The IRS proposed rule on the implementation of the OECD’s Crypto Asset Reporting Framework (CARF) is under review at the White House, signaling impending release. (OIRA)
The IRS issued guidance allowing investment funds organized as grantor trusts to stake digital assets without violating current investment tax rules. (Guidance)
The IRS released draft instructions for digital asset broker reporting for tax year 2026 on Form 1099-DA Digital Asset Proceeds From Broker Transactions. The instructions provide a preview of how cost basis reporting will be treated for cryptocurrency transactions. (Draft instructions)
Department of Justice
U.S. Attorney Jeanine Ferris Pirro, Acting Assistant Attorney General Matthew R. Galeotti of the Department of Justice, FBI Deputy Assistant Director Gregory A. Heeb, and Assistant Director Kyo Dolan of the United States Secret Service, Office of Field Operations announced the creation of a Scam Center Strike Force to protect Americans against Southeast Asian cryptocurrency-related fraud and scams. (Press release)
Consumer Financial Protection Bureau (CFPB)
On December 10, the CFPB will hold a virtual meeting of the Consumer Advisory Board to discuss fair lending and debanking. (Register)
Noteworthy Quotes and Events
ADMINISTRATION
Securities and Exchange Commission (SEC)
SEC Chair Paul Atkins delivered remarks on the SEC’s Approach to Digital Assets: Inside “Project Crypto” before the Federal Reserve Bank of Philadelphia, saying, “Investment contracts can be performed and they can expire. They do not last forever simply because the object of an investment contract continues to trade on a blockchain. Yet over the last several years, too many have asserted the view that if a token was ever subject to an investment contract, it would forever be a security. This flawed view extends even further presuming that every subsequent trade, everywhere and always, is a securities transaction. I struggle to reconcile that view with the text of the law, with Supreme Court precedent, or with common sense. Meanwhile, developers, exchanges, custodians, and investors have been trying to navigate in a fog, without SEC guidance, but obstruction. They see tokens that function as payment instruments, governance tools, collectibles, or access keys. They see hybrid designs that do not fit neatly into any existing box. And they see a stance that, for too long, has treated all of these tokens as if they were shares of common stock. That perspective is not sustainable or practicable. It comes with substantial costs, yet little benefit. It is not fair to market participants or to investors, and it is not consistent with the law. It also invites a destructive race to move offshore. The reality is that if the United States insists on making every on-chain innovation run the through a securities-law minefield, those innovations will migrate to jurisdictions that are more willing to distinguish among different kinds of assets, and more willing to write down the rules in advance. Instead, we are going to do what regulatory agencies are supposed to do. We are going to draw clear lines and explain them in clear terms.” (Remarks)
SEC Division of Trading and Markets Director Jamie Selway gave remarks on digital assets and trust at SIFMA’s Market Structure Conference, saying, “In recent years, marketplace trust was again challenged. Unlike the Great Depression, this loss of trust was not caused by a marketplace failure. This time, through poor policy choices, regulation by enforcement, and a lack of good faith engagement, the marketplace trust in the public sector was impaired. This loss was most acute with investors active in digital assets. The Chairman intends to repair this damage. On July 31, Chairman Atkins announced ‘Project Crypto,’ building on the leadership of Commissioner Peirce and the Crypto Task Force, to ‘help ensure that the United States remains the best place in the world to start a business, develop cutting-edge technologies, and participate in capital markets.’ Competition, amongst and between incumbents and innovators, is central to this initiative…Since the summer, the Division has engaged a wide variety of market participants regarding digital assets, across a number of functions such as primary issuance, secondary trading, and custody. Our goal is to advise the Commission on how to facilitate ‘innovation without arbitrage.’ As policy is modernized to accommodate digital assets, I believe neither new entrants nor legacy providers should be advantaged. We should not impose ourselves between commercial competitors. And we should trust market forces as the ultimate arbiter of value.” (Remarks)
Treasury Department
In a speech at the U.S. Treasury Market Conference at the Federal Reserve Board of New York, Treasury Secretary Scott Bessent said, “…we are closely monitoring growth in money market funds and the stablecoin market, which are both large investors in Treasury bills. Money market funds are now valued at about $7.5 trillion, having grown by nearly $1 trillion in the last year alone. The stablecoin market, meanwhile, is valued around $300 billion and could grow tenfold by the end of the decade thanks to the innovation made possible by the GENIUS Act. As money market funds and stablecoins grow, so too will the demand for Treasury bills.” (Remarks)
Bessent posted, “Today USTreasury and the IRSnews issued new guidance giving crypto exchange-traded products (ETPs) a clear path to stake digital assets and share staking rewards with their retail investors. This move increases investor benefits, boosts innovation, and keeps America the global leader in digital asset and blockchain technology.”
CONGRESS
Market Structure
Senate Banking Chair Tim Scott (R-SC) said, “Next month, we believe we can mark up in both” Senate Banking and Agriculture committees and “get this to the floor of the Senate early next year so that President [Donald] Trump will sign the legislation, making America the crypto capital of the world.” (Politico)
Scott also said, “The Democrats have been stalling and stalling and stalling because they don’t want President Trump to make America the crypto capital of the world. They don’t want to give him the win. It’s not just for President Trump — it’s for the American people.” (Politico)
Scott posted “Our crypto market structure work is about empowering the American people - including single moms like the one who raised me. We’re aiming to markup bipartisan legislation next month and get it to President Trump’s desk to keep America economically dominant for decades.”
Sen. Cynthia Lummis (R-WY) said, “Obviously, we need sufficient votes on a bipartisan basis to get to cloture. It’s legislation that Democrats needed some more time to just absorb and process, put their fingerprints on. I think they’re diving in, and I’m encouraged.” (Punchbowl)
House Committee on Agriculture posted “The push for clear digital asset rules continues gaining steam. Bipartisan work in the House and Senate is moving us closer to a strong, transparent market structure that protects consumers, fosters innovation, and ensures America remains a global leader.”
Trump Conflicts of Interest
Rep. Frank Pallone (D-NJ) posted “Trump’s net worth has increased by 70% since he took office because of his backroom deals, crypto scams, and favors for foreign governments.”
Sen. Jeff Merkley (D-OR) posted “Of course Trump’s pardon of the Binance CEO was corrupt! Trump isn’t going to let anything get in the way of his family’s crypto grift.”
Rep. Greg Casar (D-TX) posted “Trump gets: $5 billion in crypto deals, a $400 million plane, a $300 million ballroom, millions in deals from Facebook, Amazon, CBS. Everyone else gets: higher prices for health care, electricity, and groceries. Corruption, plain and simple.”
Sen. Adam Schiff (D-CA) posted “Donald Trump’s ‘good friend’ is helping enrich the Trump family with new real estate and crypto deals. In return, Trump rolls out the red carpet for the Crown Prince of Saudi Arabia.”
Rep. Ted Lieu (D-CA) posted “Personalized gold bars from the Swiss. Used jumbo jet from Qatar. Huge amounts of $$$ from crypto. The amount of corruption in the White House is at unconscionable levels. We need some real serious ethics across the federal government.”
Sen. Dick Durbin (D-IL) posted “Pardoning crypto criminals. Coddling January 6th rioters. Purging career prosecutors. Firing FBI agents. Lining his pockets with $230 million in taxpayer money. All while the American people grapple with high costs. Corrupt.”
Sen. Chris Murphy (D-CT) posted “The scope of dirty money (terrorists, criminals, sex predators) moving through crypto exchanges is dizzying. And as this article describes, Binance - the company at the the heart of Trump’s crypto corruption - continues to be one of the worst offenders.”
Rep. Don Beyer (D-VA) posted “Trump’s family is lining their pockets with crypto profits and his administration is full of billionaires and hedge fund managers.”
Rep. Jason Crow (D-CO) posted “These people couldn’t be more out of touch. While working Americans are watching their costs go up, the Trump family is bragging about their crypto deals. Sick stuff.”
Miscellaneous
Rep. Steve Cohen (D-TN) posted “I introduced the Clean Cloud Act today. Cryptominers & AI data centers are growing fast and straining grids—and Memphis families already face some of the highest energy burdens in the country. My bill ensures new data-center growth is powered by real clean energy, not higher bills for ratepayers.”
Rep. Warren Davidson (R-OH) posted “I’m introducing the Bitcoin for America Act to strengthen long-term national financial resilience and position the U.S. at the forefront of global asset leadership! This marks an important step forward in embracing the innovation that millions of Americans use every day.”
Davidson also posted “The Bitcoin for America Act: + Codifies the Strategic Bitcoin Reserve EO + Exempts Bitcoin payments of tax liabilities from capital gains + Holds Bitcoin tax payments in the Strategic Bitcoin Reserve + Tax payments could then be saved rather than spent Sound money is essential to defending freedom.
On the inclusion of a Federal Reserve ban on creating a central bank digital currency (CBDC) in the National Defense Authorization Act (NDAA), House Financial Services Chair French Hill (R-AR) said, “That’s a commitment that was important to both Speaker [Mike Johnson (R-LA)] and President [Donald] Trump.” (Politico)
Hearings: Nomination Hearing of Mike Selig for CFTC Chair
In his opening statement before the nomination hearing of Mike Selig to lead the CFTC, Senate Agriculture Chair John Boozman (R-AR) said, “I want to repeat what I have said multiple times before this committee: the CFTC is the right agency to regulate spot digital commodity trading. The CFTC – and only the CFTC – should regulate the trading of digital commodities. This is because only the CFTC understands the unique characteristics of commodities and commodity-based contracts. While the CFTC has the right regulatory approach, expertise, and skill set to handle this new responsibility, it is up to Congress to grant the agency this new authority to regulate spot digital commodity trading. Failure by Congress to do so will leave U.S. consumers vulnerable to bad actors and will keep the U.S. behind the rest of the world. Though a regulatory framework for spot digital commodities has yet to be authorized by Congress, the markets and underlying technology are fast at work. Absent a comprehensive U.S. regulatory framework, bad actors will continue to go unchecked, and legitimate entities will be disincentivized from participating in U.S. markets. All the while, U.S. consumer participation will continue to grow, as will the risk faced by consumers. This committee has an opportunity to advance its portion of a regulatory framework that protects U.S. customers, allows U.S. businesses to grow, and recognizes the importance of innovative blockchain technology and fundamental principles like the right to self-custody. I want to thank Senator Booker for his partnership on our bipartisan discussion draft, and I look forward to working with him and the rest of this committee to advance a bipartisan proposal out of this committee. The time to act is now, and I look forward to working with each of you towards advancing this goal.” (Press release)
Digital asset policy was a major focus in the Senate Agriculture Committee hearing to consider the nomination of Mike Selig for CFTC Chair, including the below Q&A:
Sen. John Boozman (R-AR): “Mr. Selig, as this committee deliberates on granting the CFTC spot digital commodity regulatory authority, what key considerations should we weigh, and why do you feel the CFTC is the right regulator for spot digital commodity trading?”
Michael Selig: “Thank you, Senator and thank you for the time that we spent in your office discussing these matters. I think it’s a critical opportunity for this committee and for our country to move forward with digital asset market structure legislation. It’s been a priority of the President, and of course, is something that’s great for this country. You know, we have so many entrepreneurs and builders and developers that have been pushed off shore, and this has been due to the lack of clarity. We need clear, simple guidelines. We need consumer protection, and we need to stop with the regulation by enforcement. And I think this is a real opportunity to develop a framework that can allow for software developers to thrive, for new exchanges to crop up that are going to protect investors and have the types of controls that you would expect in an exchange and make sure that we have the right disclosure and requirements that we have typically in our financial markets.”
Sen. John Boozman (R-AR): “As the committee deliberates granting the CFTC spot digital regulatory authority. How should we think about DeFi and ensuring that activities with respect to technology are not subject to inappropriate intermediate, intermediary registration regimes?”
Michael Selig: “Thank you, Senator. As I mentioned, I think there is this issue of regulation by enforcement, and sometimes we take a one size fits all approach to all types of financial products and services. But really, blockchain enables such a broad swath of new types of products, services, applications, and so it may not make sense in many cases to apply financial regulation, for example, to a video game app that runs on a blockchain. So, I think when we’re thinking about defi. It’s something of a buzz, buzz word, but really we should be looking to on chain markets and on chain applications, and thinking about the features of these applications, as well as where there’s an actual intermediary involved, where we have some operator administrator, and in many cases, that may not be and so we have to think about the best approach. And I look forward to working with your office to figure that out.”
Sen. Amy Klobuchar (D-MN): “Do you think you can do that with your existing resources when you add the potential crypto portfolio on some of the new things that are coming your way for regulation?”
Michael Selig: “Senator I’m looking forward to getting into the seat and, if confirmed, I’m really I’m going to take a hard look at the resource needs of the agency, and hope to do that assessment, and then get back to your office and work to make sure we have the resources to fulfill our critical mission.”
Sen. Amy Klobuchar (D-MN): “Okay, what specific regulatory tools or approaches would use to ensure that innovation in crypto markets does not come at the expense of basic safeguards to protect the public?”
Michael Selig: “So, it’s vitally important that we have a cop on the beat. It’s critical that we can’t have another big loss of customer funds. So we’ve seen Ms. global Pere grant and most recently, FTX, the CFTC has always been a regulator that’s focused on protecting customer funds, making sure that we have appropriate disclosure where required to do so, and protecting consumers, because at the end of the day, these are critical markets, and they affect, as I mentioned, the price of the groceries as well as of course, now, as we’re embarking into new digital domains, they could affect things like GPU costs and digital asset costs. And so I feel that we’ve massively over regulated the real-world economy, as I mentioned. This affects agriculture, energy, crypto and so much more. And so if we can figure out what works, what doesn’t work, that’s going to be the key to unlocking really great markets for individual, for every individual, and making sure that we don’t constrain our businesses and push them offshore.”
Sen. Amy Klobuchar (D-MN): “So you represented numerous derivatives and crypto clients while in private practice. How are you going to deal with conflicts of interest, especially when you will be the only person if confirmed on the commission?”
Michael Selig: “Of course, I think that’s a critical issue. Having come from a law firm where, in practicing law for many years, I will always hold myself to the highest ethical standards. I have, of course, been through a process with a non-partisan office of government ethics as well as the ethics staff at the CFTC. I have an ethics agreement that I’ve signed and plan to adhere to all the terms of that. You know, as a lawyer, you know, I’m very much one that follows the guidelines in the contract.”
Sen. Cindy Hyde-Smith (R-MS): “Thank you, Mr. Chairman and I sure enjoyed our meeting earlier. I appreciate your willingness to serve. As I said before, and I all the issues that we talked about, is very important to Mississippi, so I’m sure we will have a lot to work on together, but as products and markets participants emerge, the agency must adapt to rising demands and increasing pressure on its limited resources. The Commission deserves recognition for how effectively it is managed these emerging duties so far, however, the Congress now weighing market structure legislation that may expand the CFTC jurisdiction, the challenges ahead are likely to become even more significant.
So my question is, how do you plan to ensure the CFTC remains focused on its core mission of protecting hedgers and supporting transparent, well functioning futures markets, especially for our farmers and ranchers, while also establishing a new regulatory framework and taking an increased responsibility for rapidly evolving digital asset market. And what makes the CFTC well suited to take on this responsibility?”
Michael Selig: “Thank you, Senator, and I too very much enjoyed our conversation this morning. If the CFTC is not doing its job at making sure that our markets are working for our agricultural firms, our farmers, our ranchers, our digital economy now as well, it’s simply not working, and so we need to make sure that these are well functioning markets, and it’s my responsibility, if confirmed as Chairman to get that job done. I believe that we need to be vigilant in our surveillance efforts, in our examination efforts of market participants, and make sure that we’re policing fraud and manipulation these markets. And it’s the CFTC critical responsibility for overseeing that these markets are well functioning and efficient, and I take that very seriously and intend to do that job. As I mentioned in my opening statement, I think some of the there’s just massive over regulation of participants, and as we discussed this morning, particularly the FCM community, where many of America’s farmers and ranchers are reliant on these entities to access the derivatives markets, and if it’s too expensive, if we’re over regulating them, and they don’t have access, they’re not going to be able to hedge their risks. And that’s very concerning. That can result in a lot of volatility in the markets, and that can affect everyday consumers. And so I’m committed to making sure that these markets are well functioning and that appropriate risk management tools are available to our nation’s farmers, ranchers and everybody else.”
Sen. Tina Smith (D-MN): “I want to just start by associating myself with the questions that Senator Hyde-Smith and Senator Klobuchar asked about the big potential change in the mission of the CFTC with regard to digital commodities, and what that would mean for the CFTC if it were to take on that additional challenge. What do you think it would take? What would be the first two or three things that you would do? How would you approach this with a little bit more detail as the CFTC takes on this, you know, significant new focus, potentially depending on what happens in Congress?”
Michael Selig: “Thank you for that question. I think it’s vitally important, as I mentioned, that we have certainty, clarity and consumer protection in these markets. They’re being used by everyday Americans, and having real guard rails around what these markets look like is critical. And I really do applaud the efforts of this committee, as well as others within the Congress, for putting together comprehensive, bipartisan market structure legislation.
And I think that’s the first step once we get market structure legislation in place, I think it’s vitally important that we implement with haste, because these markets are going to keep developing, and we have to keep in pace with the rapid speed of innovation, there are a lot of things that we can do with our existing authority, and I would very much take on the mission of making sure that our investors are protected in these markets. The CFTC has authority to police fraud and manipulation in the crypto spot markets. It has authority to regulate the futures markets, and also when there’s leverage and financing involved in these transactions.”
Sen. Tommy Tuberville (R-AL): “I’d like to hear your thoughts on something. I hear a lot from our bitcoin miners that bitcoin is a commodity. If we sell corn, if we sell cotton, we pay taxes on it when we sell that commodity, but when a bitcoin is mined from a miner, IRS is standing next door, ready to get their money from this bitcoin. What’s your thoughts on that?”
Michael Selig: “Well, Senator, I think that blockchain enables all new modes of commerce and really great economic mechanism design where people can participate in these networks like the Bitcoin network, earn rewards and really earn a living by contributing to these networks. I think they’re vitally important infrastructure. We should have them built in the United States. We should make sure that we’re protecting our minors and infrastructure in the United States in terms of some of these areas that are really beyond the scope of the CFTC remit, around tax and other things. I think it’s vitally important that we work together with the Treasury and with our other agencies within the administration to make sure that we’re providing the right incentives to these market participants.”
Sen. Tommy Tuberville (R-Ala.): “Yeah, it just seems a little unfair to me that if you’re a miner, you’ve got to pay taxes on it immediately and not wait till you sell it. You know, we hear that complaint all the time. I hope it’s something we look into and encourage more mining.”
Sen. Ben Ray Luján (D-NM): “As we’re working to provide the CFTC with new authorities over digital assets, spot markets with tokens like bitcoin, trading over 50 billion per day, the new authority would be an enormous new duty. The CFTC is a small agency compared to the SEC. Mr. Selig, yes or no. Do you believe the CFTC would need more funding and staff to properly oversee digital asset spot market?”
Michael Selig: “Senator thank you for that question. I really enjoyed taking the time to meet with you yesterday and having the opportunity to talk through crypto and lots of other issues. I think that once I’m in the seat, I will be able to take a much better look, if confirmed, of course, at the resource needs of the agency. And so I’m very eager to get into the seat and be able to make that determination.”
Sen. Ben Ray Luján (D-NM): “I’ll take that as a yes, I appreciate that. Now, one of the areas I’m concerned about we spoke about this was the FTX debacle. The relationship between Almere research FTX presented many conflicts of interest and ultimately led to massive fraud. What are your views on the deeply integrated structures of major digital asset companies, and should exchanges be allowed to be vertically integrated?”
Michael Selig: “Thank you, Senator One of the great things that kind of came out of FTX, as much as it was a massive disaster, is that the CFTC regulated DCM, the previously ledger acts and became and that that DCM in the in the Clearinghouse and the DCO were not lost, which is great. I mean, and Congress for moving forward with bipartisan market structure legislation. I think it’s vitally important that we protect investors and protect customer funds, and intend to do so if confirmed as Chairman.”
Sen. Ben Ray Luján (D-NM): “Does vertical integration create risk?”
Michael Selig: “Senator, vertically integrated structures are one of the novelties that we’re seeing in our markets today. The CFTC principles-based regime really allows for more innovation in the way that businesses are structured. But of course, we need to comply with the same sorts of principles and requirements, so to the extent, of course, that a vertically integrated structure raises, for example, conflicts, issues, they might be addressed differently, or there might be additional requirements in place to protect against those issues, but the bottom line is that we should be always making sure that the same protections are in place, that investors are just as safe with a vertically integrated structure as without, and if confirmed, that’s something I very much look forward to considering and figuring out the best way forward.”
Sen. Ben Ray Luján (D-NM): “There is it fair to say, Mr. Selig, that under your watch you will not allow an FTX to happen again?”
Michael Selig: “Senator, as I mentioned the other day, you know, manipulation and fraud are only you know, bounded by the ingenuity of man, and so it’s very hard to always be able to prevent.”
Sen. Ben Ray Luján (D-NM): “Under your watch, is it fair to say that if you identify a loophole that would allow an FTX fraud, criminals, crooks to exist that you’ll close them?”
Michael Selig: “The CFTC will be a cop on the beat, a strong cop on the beat. Under my leadership, and I intend to always adhere to the law, make sure we’re enforcing the law.”
Sen. John Hoeven (R-ND): “In the digital asset space, have you looked at both the House legislation and the proposed Senate legislation, and does it provide you, in your opinion, does that provide the statutory and regulatory or the ability to build the regulatory framework in a way that will make sure that, again, there’s transparency and that people understand what’s going on with these digital markets, and that, as Senator Lujan said just a minute ago, that people are adequately protected?
Michael Selig: “One of the areas that we discussed earlier today is really the breadth of what’s happening in these digital asset markets. There’s a wide range of new types of blockchain networks, applications and assets, and so the legislation, I think this, is a great, great effort to bring clarity, certainty and consumer protection to these wide ranging, novel markets. I believe that the legislation, you know, the efforts in this committee, as well as the Clarity Act, the efforts in the house are just absolutely critical. They provide the scaffolding and the infrastructure that we need to make sure that we have a registration regime, that we have requirements around consumer protection, and also provide a lot of authority to the CPC and its sister agency, the SEC to flexibly regulate. There’s going to be a lot of work to be done in implementing these statutes, so I really am excited for you all to get the legislation done, and I think these are both great efforts.”
Sen. John Hoeven (R-ND): “And are you prepared to help members of this committee make sure they understand what is being done in this space and accomplish with this legislation, but also what additional safety measures may need to be in place to get the job done fully and well?”
Michael Selig: “Yes, I think one of the benefits of having spent many years in private practice, working with digital asset firms and then working as Chief Counsel at the crypto task force at the SEC has been that I’ve seen and met with many of these crypto businesses understand both the good and the bad, and what we need to do to make sure that we’re protecting our investors.”
Sen. Raphael Warnock (D-GA): “We are currently negotiating this legislation, and many of us who are engaged in these negotiations have called for provision that commissioners from both parties be appointed for the CFTC to implement any crypto legislation through new rules or regulations. And when I speak to leaders in the crypto industry, they tell me that it’s critical to them that crypto laws and regulations have bipartisan support. This is what we’re hearing from the industry. Do you agree that having bipartisan support behind new crypto currency regulations would help ensure stability and durability of these policies beyond this administration, and be better for both the industry and the investors long term, so that you’re not suffering from whiplash depending on whether it’s a Democratic administration or Republican administration. Is that a fair assessment?”
Michael Selig: “Senator, as I mentioned earlier, I really commend the efforts of this committee to develop bipartisan crypto market structure legislation. I think both voices in the room are critical to getting this right, and if confirmed as Chairman and assuming this legislation were to pass and be signed by the President, the notice and comment rulemaking process is a great way to get a diversity of viewpoints through comments.”
Sen. Raphael Warnock (D-GA): “We’re not getting any minority input from the agency on how it would implement such a complex piece of legislation, and that’s making this whole process harder and harder. I’m going to turn to another subject matter, basic consumer and investor protections are the pillars of a sound financial system. Regulatory clarity is needed for consumers who trade in digital commodities, and last week, Chair Boozman and Senator Booker released a bipartisan discussion draft to regulate digital assets. This discussion draft is an important starting point, but key sections remain under negotiation, including what new consumer protections are necessary to protect consumers from bad actors. Investor protection is critical, and the crypto markets are heavily focused on retail investors. What new authorities does the CFTC need from Congress to ensure consumers are treated fairly, in your view?”
Michael Selig: “Thank you, Senator as I mentioned earlier, the CFTC has existing authority to police fraud and manipulation in these markets, but bipartisan legislation really can take that to a further level by ensuring that we have market regulation for these markets, so things like invest registration examinations of these platforms, making sure that consumer funds are safe and secure. Segregation of funds, things of this nature that we have and expect in our markets today, and of course, coming from the SEC currently working well with the SEC on the disclosure requirements to the extent that there are securities that are being offered in connection with a digital asset, making sure there’s disclosure there. All these things can work really well together to making sure that we have a robust and resilient regime around crypto.”
Sen. Raphael Warnock (D-GA): “One last question, the CFTC is the only financial regulator that is funded entirely by appropriations, and in the Boozman Booker discussion draft, they authorize an additional 150 million dollars to the CFTC to hire new staff, improve their technology and prepare the agency to implement a massive new regulatory structure. Do you support the authorization of 150 million dollars to the CFTC to implement a crypto regime as designated by the Boozman Booker discussion draft?”
Michael Selig: “If confirmed, I really want to get in the seat and understand the needs of the agency. So, it would be premature for me to take a view on the exact amount and what I support.”
Sen. Tommy Tuberville (R-AL) posted “Pleased to meet with CFTC Chairman nominee MikeSeligEsq this afternoon. I am confident he will be a strong advocate for access to competitive and financially sound markets, digital commodities, and will fight to improve our rural communities.”
Sen. Joni Ernst (R-IA) posted “Great to meet with Michael Selig ahead of his CFTC Chairman nomination. We discussed focusing the commission on its core mission: protecting farmers through fair, transparent markets and also overseeing emerging digital markets. As he agreed, it’s about putting farmers first!”
What I’m Reading This Week
A State Tax Perspective on Proposed Federal Cryptoasset Guidance, Walter Hellerstein and Andrew Appleby, Tax Notes.
Were Taxpayers Fleeced by the GENIUS Act of 2025?, Paul H. Kupiec, AEI.
