SEC and CFTC Move on US Crypto Rules Without Congress After CLARITY Act Failure

The U.S. Senate's failure to advance the CLARITY Act did not stop federal regulators from acting. Within two days of the vote, both the Securities and Exchange Commission and the Commodity Futures Trading Commission made moves that could shape how crypto and tokenized assets are traded in America.

On September 15, the Senate fell short in a procedural vote on the CLARITY Act, the sweeping bill meant to set a federal framework for digital asset markets. The tally was 49 to 50, well below the 60 votes needed to move forward.

Regulators had signaled their fallback plan in advance. SEC Chairman Paul Atkins said the agency would act within its existing authority, with or without legislation, and CFTC Chairman Michael Selig said his agency was ready to ship crypto market rules using powers it already has.

On September 17, the SEC issued its long-awaited Innovation Exemption. The order, effective immediately, lets qualifying "tokenized securities venues" trade tokenized versions of U.S. stocks for five years without being registered as national securities exchanges. Liquidity providers on those venues also receive relief from dealer registration, and the framework allows permissioned automated market makers and liquidity pools.

The exemption comes with firm limits. Tokenized shares must give holders the same rights and privileges as the underlying securities, so synthetic tokens that only track a stock's price are excluded. Companies can also object to having their shares tokenized by a third party, which blocks a venue from listing them. The SEC opened the order to public comment and said it plans to use data from this temporary regime to inform longer-term rules.

The same day, the CFTC filed a rulemaking titled "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets" with the Office of Information and Regulatory Affairs, the White House office that reviews significant federal rules before publication. The filing sits at the earliest, "prerule" stage, and its details have not been disclosed.

In an August speech, Selig outlined the likely direction: a new category of designated contract market called a "crypto asset market," where registered firms and currently unregistered crypto exchanges could offer leveraged or margined trading under CFTC oversight. Those remarks are not the filed text, so the final design may differ. The proposal must still clear White House review, return to the commission for a vote, go through public comment, and be approved again as a final rule. Selig is currently the only sitting commissioner on a body built for five.

Rules written by agencies are faster to deliver than a bill, but they are also easier to revise or reverse than a statute, and they cover only what each regulator can reach on its own. For traders and platforms, the near-term picture is more clarity on tokenized equities and a clearer view of where CFTC oversight of crypto trading is heading, but no finished market structure yet. The next milestones to watch are the SEC comment period and whether the CFTC's proposal is released for public feedback.

This article is for informational purposes only and is not financial or legal advice.