The CFTC and SEC commit to using existing authority to develop regulations for crypto assets after the Clarity Act failed in the U.S. Senate 49-50.
The leaders of the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) are committed to continuing to promote the development of a regulatory framework for crypto assets using the authorities available under existing law, immediately after the U.S. Senate failed to advance the Clarity Act further in the legislative process.
On Tuesday, the Senate voted 49-50 on a procedural motion to advance the bill, falling short of the 60 votes needed to proceed. The Clarity Act, which was expected to establish a unified federal framework for the crypto-assets market and clearly delineate supervisory responsibilities between the CFTC and the SEC, now has nearly no chance of being brought back for another vote this year due to the remaining legislative calendar in the Senate.
Both regulators have signaled that they will take proactive action even without new legislation
In a post on the social network X on Wednesday, CFTC Chairman Mike Selig called the Senate vote result “regrettable” and said Americans deserve regulatory clarity, legal certainty, and consumer-protection mechanisms in the crypto-assets market.
He said the CFTC is ready and prepared to issue regulations for this new financial field, and would support President Donald Trump in building a regulatory framework by using the agency’s existing statutory authorities.
SEC Chairman Paul Atkins also issued a similar commitment in a post on X on the same day, affirming that whether or not new laws are enacted, the SEC will still act decisively within the scope of its existing authority to provide certainty for U.S. investors and entrepreneurs shaping the future of technology, while also sending thanks to those in government and the industry who helped build the bill.
The commitment from both leaders is not surprising. Selig laid out his action plan as early as August, when he instructed staff to research regulations concerning crypto-asset exchanges and margin trading activities, and also asked them to coordinate with developers to find an approach that would allow blockchain-based financial protocols to operate legally in the U.S.
Even so, at that time he still viewed enacting legislation as the top priority, because a framework established by law would be harder for future administrations to reverse than regulations issued by the executive branch.
As for the SEC, Atkins also signaled the same stance in late July, when he said the Commission was willing, well-intentioned, and capable of building its own regulations if Congress did not act. By mid-August, the SEC released proposed rules for the industry under the framework titled “Crypto Asset Regulations.”
The failure of the Clarity Act in the Senate stemmed from unresolved disagreements over ethical limitations, mechanisms to protect developers, and rewards from stablecoins. The Republicans said they had taken onboard and incorporated into Bill 126 substantial amendments as requested by the Democrats, but the Democrats continued to urge tighter restrictions on benefits related to crypto assets for public officials, along with several other additional amendment requirements that had not been met.