French Hill Says SEC, CFTC Crypto Rules 'Fall Short' of Clarity

Rep. French Hill said the SEC and CFTC have made real progress on crypto, and that none of it is enough. The Arkansas Republican, who chairs the House Financial Services Committee, told Fox Business on Oct. 7 that the two agencies' rules fall short of what Congress has to pass.

For anyone holding tokens, the gap is not abstract. Hill's objection is durability: an exemption from the SEC or a rulemaking from the CFTC can be challenged in court or unwound by a future administration, while a statute stays in place until Congress amends it. That is a familiar pattern in US crypto rules that keep changing, and it is the gap Hill wants closed.

Hill Credits the Chairs, Then Draws the Line

Hill gave both agency heads their due. He said SEC Chairman Paul Atkins and CFTC Chairman Mike Selig "have taken steps to use their regulatory power, their exemptive relief, to give definition to digital assets and digital commodities."

Then he drew the line. "In my judgement, these regulatory policies fall short of what we have to do, which is have a legislative solution," he said, pointing to his own authorship of FIT21 in the previous Congress and the Clarity Act in this one.

His stated goal is not a tweak to the rulebook. "We need that permanent law change to make sure America is number one in digital assets and blockchain technology," Hill said.

What the Two Agencies Have Actually Proposed

The record Hill is measuring against is longer than a single order.

The SEC's March 17 interpretation sorted crypto assets into five categories. An August proposal outlined crypto offering exemptions of $5 million and $75 million, subject to public comment. On Sep. 17 the agency issued a conditional exemption letting tokenized securities venues trade tokenized National Market System stock outside the definition of "exchange." On Oct. 1 it proposed custody rules for investment advisers and registered funds, moving ahead on how funds could hold crypto. That proposal would permit crypto assets to be held in self-custody under certain circumstances and allow state trust companies to serve as custodians.

The CFTC's track is a comment process, not a finished rulebook. The agency published an Advanced Notice of Proposed Rulemaking and gave 60 days from Federal Register publication for written comments. Among the questions: whether to codify a subcategory of designated contract market registration, a "crypto asset market" built for crypto trading. The notice would also codify delivery to a user's own non-custodial wallet within 28 days as an exception to on-exchange trading. The proposals name Bitcoin and XRP among the covered digital assets.

Selig has said the agency is committed to delivering "clarity, certainty, and consumer protections" by folding crypto asset transactions into its national market framework. He has not presented it as a complete rulebook.

The Gap a Market Structure Bill Would Still Have to Close

The clearest gap is spot exchange registration, and the CFTC chair is the one who named it. "Only Congress has the authority to mandate that all crypto asset exchanges register with the Commission," Selig said.

Existing CFTC powers do not provide the same routine supervision of spot crypto exchanges that applies to registered derivatives platforms. Under the ladder Selig describes, ordinary spot crypto exchanges sit on the first rung. They are subject to the CFTC's anti-fraud and anti-manipulation authority, but are otherwise generally regulated under state money transmission laws. Federal oversight, and the retail leverage that comes with it, applies further up.

He put that limit in writing. "Unlike the Clarity Act, these regulations wouldn't require crypto assets to trade on CFTC-registered platforms. We don't have the authority to impose such a requirement without congressional action," Selig said.

Under the proposed CLARITY framework, qualifying digital commodities would generally fall to the CFTC while securities-related activity stays with the SEC. That split is the part a bill would make permanent.

What the Exemptions Leave Out

Hill's durability argument has a second edge: the relief on offer is narrow by design.

The SEC's tokenized stock exemption expires five years after publication and restricts the number of symbols and volume that can trade. It covers only fully fungible tokenized listed equities. Shares of private and pre-IPO companies fall outside it. So do synthetics, which the SEC itself called the fastest-growing segment of tokenized equities while leaving them out of the framework.

Tokenized securities venues get no fair-access obligation. They must disclose in their public notice that denials of access are not subject to SEC review. The order sets no custody standard and grants no relief from the custody requirements that already apply to registered intermediaries.

The SEC's own analysis says as much: the innovation exemption is "an agency order of limited duration and scope, not a comprehensive allocation of jurisdiction or a substitute for legislation or rulemaking." Atkins called it "a bridge toward durable rulemaking."

Where the Bill Stands, and Who Is Left to Write It

The Senate failed to advance the Clarity Act last month in a 49-50 vote. That was a cloture motion on Sep. 15, which drew 49 votes in favor and 50 against with one senator absent, leaving supporters 11 short of the 60 needed to proceed. The House passed its version of H.R. 3633 in July 2025 by 294 to 134, with 78 Democrats in support.

Selig's frustration is public. He told CNBC on Oct. 6 that he was "absolutely disappointed in Congress" for failing to deliver crypto market legislation, and said agency action cannot substitute indefinitely for a statutory framework. Both agencies are moving at the direction of President Donald Trump.

The agencies are also thin. As of Oct. 7 there were seven commissioner vacancies across the SEC and CFTC. Hester Peirce resigned from the SEC the week before, leaving Atkins and Commissioner Mark Uyeda. Selig is both CFTC chair and its sole commissioner.

What a market structure bill would have to settle is whether the spot venue holding your tokens has to register with anyone in Washington. On the CFTC's own account, it does not today.