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The SEC and CFTC can continue pursuing crypto rules under their existing authority after the Senate failed to advance the CLARITY Act, but neither agency can recreate the bill’s full market-structure framework on its own.
The Senate failed to invoke cloture on H.R. 3633 by a 49-50 vote on Sept. 15, short of the 60 votes required to move toward consideration of the bill.
SEC Offering and Transfer-Agent Proposals Can Continue
The SEC already has crypto rulemaking underway that does not depend on CLARITY. Its proposed Regulation Crypto Assets would create two securities-registration exemptions for certain investment contracts involving crypto assets.
One would cover qualifying offerings of up to $5 million over four years, while another would permit up to $75 million during a 12-month period. The proposal also includes a conditional safe harbor addressing when an investment contract ends.
A separate Sept. 1 proposal would modernize transfer-agent rules to reflect electronic recordkeeping and the use of blockchain technology in securities ownership and transfers. SEC Chair Paul Atkins said when Regulation Crypto Assets was suggested that legislation remained necessary for rules durable enough to withstand future regulatory reversals.
CFTC Explores Leveraged Crypto Market Framework Under Existing Authority
CFTC Chair Michael Selig has separately directed staff to explore a crypto market structure using authority already available under the Commodity Exchange Act.
Selig said the work could allow existing registrants and currently unregistered crypto exchanges to seek designation as a type of designated contract market called a “crypto asset market.” Those venues could offer leveraged or margined crypto trading under CFTC oversight.
The work remains exploratory. No proposed rule text or new exchange designation has been announced.
Spot-Market Oversight Still Depends On Congress
The CFTC’s existing authority does not give it general supervisory control over ordinary unleveraged crypto spot exchanges comparable with its oversight of derivatives markets.
CLARITY sought to establish a broader federal framework for digital commodities and define jurisdiction between the CFTC and SEC.
The failed Sept. 15 vote does not stop the agencies’ existing crypto initiatives. SEC proposals can continue through their rulemaking processes and CFTC staff can develop Selig’s fallback framework, while broader federal spot-market authority remains unresolved without legislation.
