Seven commissioner seats sit empty across the Securities and Exchange Commission and Commodity Futures Trading Commission as the United States heads into midterm elections on November 3, 2026. The two agencies tasked with writing crypto rules are operating with a combined three commissioners — tw...
"The American people deserve clarity, certainty, and consumer protections in the crypto asset markets." — Michael Selig, CFTC Chairman
Seven commissioner seats sit empty across the Securities and Exchange Commission and Commodity Futures Trading Commission as the United States heads into midterm elections on November 3, 2026. The two agencies tasked with writing crypto rules are operating with a combined three commissioners — two at the SEC, one at the CFTC — the thinnest bench in either agency's modern history. The crypto industry, meanwhile, has poured more than $206 million into congressional races through political action committees, making digital assets the largest single-industry PAC spending category in the 2026 cycle.
The stakes are concrete. The CLARITY Act, the only comprehensive crypto market-structure bill to clear the House, failed a Senate cloture vote 49-50 on September 15 over ethics provisions related to senior government officials' crypto holdings. Without legislation, both agencies have turned to rulemaking under existing authority. The SEC issued joint interpretive guidance with the CFTC in October, while the CFTC published advance notices for Regulation CTX and Regulation CAM — the first federal frameworks for leveraged retail crypto trading. Spot crypto markets, which account for the majority of retail volume, remain outside federal oversight.
The election results will determine whether the next Congress revives market-structure legislation, whether bipartisan commissioner nominations move forward, and whether the regulatory vacuum that has persisted since 2024 finally closes.
The SEC is authorized for five commissioners. As of November 2026, it has two: Chair Paul Atkins and Commissioner Mark Uyeda, both Republicans. Commissioner Hester Peirce departed earlier this year. No Democratic commissioner has served since 2025. The CFTC's situation is more acute. Chairman Michael Selig is the sole Senate-confirmed commissioner, operating alone since December 2025 on an agency designed for five.
Combined, seven seats are vacant across the two agencies. According to reporting by CoinTelegraph, the White House had been vetting four candidates for CFTC seats as of September 2026, but no nominations had been forwarded to the Senate. A White House official stated that President Trump intended to nominate members "in the near future," according to Quartz reporting from early September.
The practical consequences are significant. The SEC requires a quorum of three commissioners for formal rulemaking, meaning it cannot currently issue final rules — only proposed rules and interpretive guidance. The CFTC, whose governing statute does not specify a minimum quorum, can technically act with a single commissioner, but any rules issued under those conditions face heightened legal vulnerability.
According to Forbes, bipartisan commissioner nominations are "past due" and post-election momentum could ease confirmation of new members. Democratic Senators have conditioned their support for crypto legislation on the appointment of Democratic commissioners to both agencies, creating a circular dependency: no commissioners without legislation, no legislation without commissioners.
The Crypto Lending, Accountability, Regulation, Integrity, and Transparency for You Act passed the House on July 17, 2025, with bipartisan support. Its central feature was a jurisdictional split: the CFTC would oversee "digital commodities" (including Bitcoin and Ethereum), while the SEC would retain authority over "digital securities." The bill mandated federal registration for centralized crypto exchanges and established consumer protection standards.
The Senate vote on September 15, 2026, ended 49-50, eleven votes short of the 60 needed for cloture. The proximate cause was a dispute over ethics provisions. Senator Elizabeth Warren led Democratic opposition, arguing that the bill's ethics language — which prohibited senior government officials from issuing digital assets and gave state attorneys general enforcement authority — contained unenforceable loopholes. Warren cited President Trump's reported $1.4 billion in crypto-related wealth, including holdings linked to World Liberty Financial and the TRUMP memecoin, as evidence that stronger conflict-of-interest rules were necessary.
Four Republican senators also voted against the bill, though their objections were not primarily ethics-related. According to CBS News reporting, the final vote reflected a broader impasse between Democratic demands for tighter anti-corruption measures and Republican reluctance to constrain executive branch financial activity.
The bill is dead for the current Congress. The next Congress, seated in January 2027, would need to restart the legislative process.
With legislation stalled, both agencies moved to assert regulatory authority through existing powers.
CFTC: Regulation CTX and Regulation CAM. On October 5, 2026, the CFTC published an advance notice of proposed rulemaking for two new frameworks. Regulation CTX (Crypto Asset Transactions) defines when retail crypto purchases involving leverage, margin, or financing fall under CFTC jurisdiction. Regulation CAM (Crypto Asset Markets) would create a new subcategory of designated contract market specifically for crypto exchanges offering leveraged retail products.
Chairman Selig described a three-tier framework: ordinary spot trading (outside CFTC jurisdiction absent fraud), leveraged retail transactions (Regulation CTX), and crypto derivatives (existing CFTC authority). He directed CFTC staff in August 2026 to begin drafting rules using existing agency authority after the CLARITY Act stalled, stating: "If Clarity continues to stall because of Democrat obstruction, the CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets."
The public comment period closed October 20. Because the CFTC published an advance notice rather than a proposed rule, final regulations are likely 12-18 months away at minimum.
SEC: Joint Interpretive Guidance. The SEC and CFTC issued a joint interpretation in October 2026 clarifying how federal securities laws apply to crypto assets. The guidance, published as Release No. 33-11412, addressed classification questions but stopped short of rulemaking. The SEC also proposed rules addressing crypto custody under the Investment Advisers Act and Investment Company Act, with Atkins framing the action as replacing the "misguided regulation-by-enforcement campaign" of the prior administration.
The Coordination Layer: Project Crypto. The two agencies unveiled a joint initiative called "Project Crypto" to coordinate oversight and reduce jurisdictional friction. Details remain sparse, and no formal memorandum of understanding has been published.
The shift in SEC enforcement posture under Chair Atkins is quantifiable.
| Metric | FY 2024 | FY 2025 | Change | |--------|---------|---------|--------| | New crypto enforcement actions | 33 | 13 | -60% | | Crypto-related penalties | ~$4.68B* | $142M | -97% | | Total SEC enforcement actions | ~715 | ~456 | -36% |
*FY 2024 figure includes the $4.47B Terraform Labs settlement.
For fiscal 2026, which ended September 30, the Brattle Group estimates the SEC brought 308 total enforcement actions — 57% below the eight-year average. The SEC has not yet published its official FY2026 enforcement report, so crypto-specific figures are not available.
The marquee cases of the Gensler era were systematically unwound. The SEC dropped its case against Coinbase in February 2025, followed by Kraken, ConsenSys, and Cumberland DRW (all with prejudice) in March. The Binance case was dismissed in May. The Ripple appeal was dropped in August, leaving the $125 million institutional-sales penalty standing but ending further litigation.
At SEC Speaks in March 2026, Atkins stated that the prior Commission's approach constituted "a refusal to update the SEC's rules, paired with a misguided regulation-by-enforcement campaign" that "killed many would-be products or driven them offshore." The remaining crypto enforcement actions in FY2025-2026 have focused almost exclusively on outright fraud, ponzi schemes, and unregistered securities offerings involving clear investor harm.
Crypto-backed political action committees have deployed more than $206 million in the 2026 midterm cycle, according to CNBC. This makes the digital asset industry one of the largest single-sector political spending categories.
Fairshake, the industry's dominant super PAC, accounted for approximately $154 million in direct expenditures, with $56 million in reserves. Key funders include Coinbase ($52.46 million), Ripple ($48 million), and Andreessen Horowitz partners Ben Horowitz and Marc Andreessen ($23.8 million combined), according to FEC filings.
Ohio: The Marquee Race. Fairshake's affiliate Defend American Jobs spent approximately $56 million in Ohio's Senate race opposing former Democratic Senator Sherrod Brown, a longtime crypto critic, and supporting Republican incumbent Jon Husted. Total crypto-aligned PAC spending in the Ohio race reached approximately $64 million, making it the most expensive single-race crypto expenditure in U.S. history.
Bipartisan Targeting. Fairshake backed 32 House candidates — 19 Republicans and 13 Democrats — distributing $6 million in initial House endorsements. Stand With Crypto, launched by Coinbase, endorsed 45 candidates total (42 House, 3 Senate). The bipartisan distribution reflects a strategic calculation: the industry needs 60 Senate votes for market-structure legislation, which requires significant Democratic support.
The Goal. According to reporting from US News, the spending aims to preserve the current pro-crypto congressional majority and install enough sympathetic members in the next Congress to revive market-structure legislation. The industry's $196 million spend in the 2024 cycle produced a Congress that passed the GENIUS Act (stablecoins) and advanced the CLARITY Act through the House. The 2026 spend targets similar outcomes with a new congressional class.
The CFTC's proposed frameworks deliberately exclude ordinary spot crypto trading. Chairman Selig's three-tier model places spot transactions outside federal commodity jurisdiction absent fraud or manipulation. The SEC's interpretive guidance similarly does not extend registration requirements to spot crypto exchanges.
This leaves a structural gap. Spot crypto markets — where the majority of retail trading occurs — remain governed by a patchwork of state money transmitter licenses. The CLARITY Act would have mandated federal registration for centralized spot crypto exchanges. Without it, the regulatory status quo persists: 50 state regimes, no federal floor, and no single federal agency with comprehensive spot market authority.
The CFTC retains anti-fraud and anti-manipulation authority over spot commodity markets under the Commodity Exchange Act, but this is enforcement power, not supervisory authority. The agency cannot set minimum capital requirements, mandate audits, or require real-time trade reporting for spot crypto venues.
According to analysis by Sidley Austin, the remaining gap is "not incidental but structural," reflecting Congress's failure to assign spot crypto oversight to either agency.
The U.S. crypto regulatory framework, as of election eve, is defined more by what is absent than what exists. No comprehensive market-structure law. No full commission at either agency. No federal spot market oversight. The regulatory actions taken — SEC interpretive guidance, CFTC advance rulemaking — are preliminary measures operating at the edge of existing statutory authority.
The $206 million in PAC spending reflects the industry's assessment that the regulatory outcome depends on the composition of the next Congress, not on the current rulemaking pipeline. Whether that investment produces a viable path to legislation in 2027 depends on election results that are, as of this writing, unknown.
What is known: three commissioners cannot do the work of ten. The rulemaking pipeline is thin. The spot market gap remains. And the next Congress will inherit every unresolved question from this one.