What it is
Rulemaking is the formal procedure through which executive branch agencies, such as the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC), develop and issue regulations. This process typically involves publishing a proposed rule, soliciting public comments during a "comment period," reviewing feedback, and then issuing a final rule. Regulations provide specific details and enforceable requirements for how laws passed by legislatures are to be implemented.
In crypto, rulemaking is critical for establishing clear regulatory frameworks. Agencies often grapple with how existing laws, designed for traditional finance, apply to novel digital assets. The absence of specific crypto-focused rules has led to "regulation by enforcement," where agencies use enforcement actions to set precedents. Calls for more explicit rulemaking, often through a "comment period," aim to provide clarity for market participants, defining what constitutes a security or commodity and outlining operational requirements for crypto firms.
Why it matters
Rulemaking directly shapes the legal landscape for crypto, defining what's allowed and how it's regulated, profoundly influencing market development and investor safety.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice