Gemini

Polymarket

Green Light

The Digital Asset Market Clarity Act (CLARITY Act) is moving through Congress at the same time a controversy over internal conduct at the Commodity Futures Trading Commission (CFTC) is raising pointed questions about whether the regulator is fit to take on a much larger role.
The bill would give the CFTC a central role in regulating digital commodities and related intermediaries, while preserving certain aspects of SEC authority over primary market crypto transactions. The legislation cleared the Senate Banking Committee on May 14, 2026, in a 15-9 bipartisan vote, moving it closer to a full Senate floor vote.
<h2 id="what-the-clarity-act-would-change">What the CLARITY Act Would Change</h2>
The bill hands the CFTC exclusive authority over spot and cash markets for digital commodities, a significant expansion for an agency that has historically only refereed derivatives. It would require digital commodity exchanges, brokers, and dealers to register with the CFTC, giving the regulator broad new jurisdiction over the biggest and most active segments of the US crypto market. The bill does not remove the SEC from crypto oversight entirely. Instead, it preserves SEC authority over certain primary market activities, particularly those involving fundraising, issuance, and registration-related disclosures.
<h2 id="controversy-clouds-the-cftc-s-readiness">Controversy Clouds the CFTC's Readiness</h2>
The timing is awkward for the agency. A New York Times investigation alleges that senior CFTC officials spent the past year helping clear regulatory obstacles for crypto and prediction market firms tied to the Trump family, while marginalizing career staff who raised concerns. At the center of the investigation are three firms seeking approval for prediction market-related operations: Polymarket, Crypto(.)com, and Gemini affiliate Gemini Titan.
According to the report, career staff expressed concerns that Polymarket did not have adequate fraud protections, Crypto(.)com failed to treat smaller bettors fairly, and Gemini Titan had not completed the required regulatory review process before operating. Despite those objections, then-acting CFTC Chair Caroline Pham and senior counsel Brigitte Weyls allegedly intervened in favor of the companies. By the end of 2025, two officials who had raised questions were placed on administrative leave and investigated, and three others involved in crypto enforcement faced similar fates.
The report also points to a steep decline in crypto-related enforcement activity under the current administration, with the CFTC announcing only two digital asset-related enforcement actions during Trump's second term, both involving individuals.
The White House rejected suggestions of wrongdoing. Polymarket defended its compliance practices, saying it maintains strong safeguards, while Crypto(.)com said it complies fully with federal regulations. Gemini did not respond to requests for comment.
The episode puts Congress in a difficult position. The tougher test is whether Congress is giving expanded authority to an agency that can push back against the firms most eager to benefit from it.
Sources <a href="https://cryptoslate.com/cftc-crypto-oversight-clarity-act-independence-test/" rel="noopener noreferrer nofollow">CryptoSlate: CFTC may gain broader crypto oversight as staff who questioned major firms were reportedly sidelined</a> <a href="https://www.financemagnates.com/cryptocurrency/regulation/do-not-publish-breaking-clarity-act-draft-gets-green-light-in-senate/" rel="noopener noreferrer nofollow">Finance Magnates: CLARITY Act Draft Gets Green Light in Senate</a> <a href="https://www.congress.gov/bill/119th-congress/house-bill/3633/text" rel="noopener noreferrer nofollow">Congress.gov: Digital Asset Market Clarity Act of 2025, Full Text</a>

CLARITY Act Could Supercharge CFTC Power

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