SEC, CFTC Rulemaking Timelines Could Entrench Digital Asset Regulations, Analyst Warns

The finalization of digital asset rules by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) within the next 18 to 24 months may establish a regulatory framework that is difficult to alter, according to Kristin Smith of the Solana Policy Institute. Smith’s argument rests on two key timelines: the typical duration of agency rulemaking and the limited window provided by the Congressional Review Act (CRA) for Congress to overturn such rules.

Agency rulemaking processes generally take between 18 and 24 months to complete. If rules are finalized around the summer of 2028, they could become entrenched due to procedural constraints. The CRA allows Congress a specific, limited period to review and potentially reject new agency regulations. Once this window closes, overturning finalized rules becomes significantly more challenging.

This situation is particularly relevant as Congress recently failed to pass its own market structure bill. The Clarity Act, which aimed to delineate regulatory responsibilities between the SEC and CFTC for digital assets, did not advance in the Senate on September 15, 2026, falling short of the 60 votes needed. This legislative inaction positions the SEC and CFTC as the primary drivers of digital asset regulation.

Kristin Smith, who also began serving as interim CEO of the Blockchain Association on October 17, 2026, stated that once institutions begin building on an established regulatory framework, it becomes more entrenched. Disrupting businesses already operating under these rules would be a significant undertaking. This entrenchment effect means that rules finalized in the coming years could be difficult to reverse, regardless of whether they are favorable or unfavorable to the industry.

Smith’s analysis suggests a strategic shift for the cryptocurrency industry. Instead of solely focusing on waiting for new legislation, lobbying efforts may need to prioritize influencing the ongoing agency rulemaking processes to ensure favorable outcomes. The Solana Policy Institute itself has been actively engaging with policymakers, holding over 300 meetings in 2026 and submitting comment letters, such as one to the CFTC on July 9, 2026, advocating for specific exemptions and frameworks.

Past agency actions, such as a joint SEC and CFTC interpretive release in March 2026 that classified Solana as a digital commodity, demonstrate the agencies’ capacity to shape the regulatory landscape without new statutes. Smith has cited previous policy successes, like changes to IRS broker rules, as examples of how industry engagement with agency processes can yield positive results.

However, uncertainties remain regarding the exact timing of formal SEC and CFTC rulemakings, the specific content of these future rules, and whether Congress will revisit market structure legislation. The Solana Policy Institute’s comment letter, for instance, pushed for specific considerations like exemptions for non-custodial wallets and frameworks for compliance. The effectiveness of these efforts in shaping the final rules is yet to be determined.

The current regulatory environment, marked by legislative inaction and the procedural realities of agency rulemaking, suggests that the rules finalized in the near future will likely set the long-term direction for digital assets. The industry faces the challenge of navigating this process to achieve a regulatory path that supports innovation while managing the risk of entrenched, potentially unfavorable, frameworks.

Why This Matters

The materials describe a narrow update: Kristin Smith stated that digital asset rules being developed by the SEC and CFTC, which are expected to take 18-24 months to finalize, are likely to become permanent due to the Congressional Review Act’s limited window for overturning rules and the entrenchment effect of institutional adoption. The exact timing of SEC and CFTC formal rulemakings.

Broader Context

Source materials place the factual news in this context: Congress failed to pass its own market structure bill.