French Hill Says SEC and CFTC Crypto Rules Fall Short of CLARITY Act

Without such legislation, he warned, regulatory uncertainty will persist

Rep. French Hill, chair of the House Financial Services Committee, stated in an October 7, 2026, interview that recent regulatory actions by the SEC and CFTC on cryptocurrency are insufficient without a permanent federal law. The Arkansas Republican acknowledged the agencies’ efforts but emphasized that rulemaking alone cannot provide lasting stability for digital asset markets. He argued that only congressional legislation can create a durable framework resistant to reversal by future administrations. Hill explained that agency rules, while valuable, remain vulnerable to legal challenges and policy shifts, unlike statutes passed by Congress. He pointed to the CLARITY Act as the necessary solution to define digital assets, establish clear jurisdiction, and protect investors.

Without such legislation, he warned, regulatory uncertainty will persist, hindering innovation and increasing risk for market participants. Why Agency Rules Alone Cannot Secure Crypto’s Future The committee chair stressed that executive branch rulemaking lacks the permanence of law, noting that regulations can be rescinded or altered with changes in leadership. He cited past reversals in financial policy as evidence that crypto needs a statutory foundation. Hill argued that the CLARITY Act would settle ongoing debates over whether tokens are securities or commodities, reducing litigation and confusion. How Would the CLARITY Act Change Regulatory Oversight? Hill described the bill as a bipartisan effort to assign clear roles to the SEC and CFTC based on asset characteristics. He said it would create registration pathways for exchanges, clarify custody rules, and strengthen consumer protections.

The legislation, he added, would also require transparency from issuers and prevent regulatory arbitrage between agencies. Frequently Asked Questions What is the CLARITY Act? The CLARITY Act is a proposed federal law designed to establish a clear regulatory framework for digital assets by defining their classification and assigning oversight responsibilities to the SEC and CFTC. Why does Rep. Hill believe rules are not enough? Hill argues that agency regulations can be easily reversed by future administrations or courts, while a statute passed by Congress provides durable, long-term stability for the crypto market. What consequences does Hill warn about without federal crypto legislation? Without the CLARITY Act, Hill warns that regulatory uncertainty will continue, potentially stifling innovation, increasing investor risk, and prolonging legal disputes over jurisdiction.