Senate's Spot Crypto Bill Grants CFTC New Powers, Introducing Unforeseen Risks to Crypto Market

CFTC Control Over Crypto: The proposed Digital Commodity Act of 2025 aims to give the Commodity Futures Trading Commission (CFTC) full authority over spot crypto trading, potentially slowing market growth due to new registration requirements for exchanges and brokers.

Impact on Market Dynamics: While the bill seeks to clarify regulatory confusion between the CFTC and SEC, it may lead to increased costs and reduced trading activity, which could result in unpredictable price movements in the short term.

Self-Custody Protection: The draft maintains the right for individuals to self-custody their crypto assets, allowing personal ownership and transfer, but does not extend this protection to services that hold coins for others.

Timeline for Implementation: The rulemaking process is expected to take 18 to 36 months, with initial impacts on the market likely not felt until 2027, as exchanges begin pre-registration to demonstrate compliance.