CFTC updates guidance to allow tokenized assets and blockchain recordkeeping after CLARITY Act vote fails

# Summary

# What changed

The March FAQ has been revised with two specific points:

• Registered, authorized firms may invest customer funds in tokenized forms of assets if the tokenized form grants holders legal and economic rights that are the same or functionally equivalent to rights in the traditional form.

• The CFTC said it "would not object" to companies using blockchain-based recordkeeping under these rules.

# Why this matters

The guidance reduces uncertainty for firms that want to hold or offer tokenized versions of existing assets. By linking permissibility to whether tokens confer equivalent legal and economic rights, the CFTC draws a clear condition firms can evaluate.

Stating it would not object to on-chain recordkeeping removes a key practical question for firms considering blockchain systems for custody, audits, and transaction records.

# Political and regulatory context

Act, a Senate bill meant to clarify the roles of the CFTC and Securities and Exchange Commission in overseeing digital assets. With the vote failure, many expect Congress will not pass crypto market-structure legislation before 2027. That expectation has encouraged federal regulators to advance rulemaking independently.

House. The SEC chair, Paul Atkins, publicly said the SEC was "ready, willing, and able" to propose rules on crypto in the absence of congressional action. The SEC proposed rules covering certain investment contracts involving crypto assets in August.

# Practical implications for firms and market participants

• Product design: Firms issuing or holding tokenized assets should document and verify that tokens provide legal and economic rights equivalent to the underlying traditional asset. That equivalence is the linchpin for permissibility under the new guidance.

• Recordkeeping choices: Companies can consider blockchain-based ledgers for regulatory recordkeeping needs without expecting CFTC objection, provided other regulatory obligations are met.

• Compliance processes: Registered entities should update compliance and legal analyses to incorporate the FAQ change and prepare to explain, if requested, how token rights map to traditional asset rights.

# Outlook

With Congress stalled on the CLARITY Act, the immediate regulatory path favors agency-driven action. Firms should monitor upcoming CFTC and SEC rule proposals and consider aligning product documentation and recordkeeping practices with the conditions outlined in the revised CFTC FAQ.