Crypto Regulators Move Faster After CLARITY Act Failure

The CLARITY Act, a proposed bill aimed at regulating the crypto market, failed to advance in the Senate on September 16, 2026. Despite this setback, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have announced new steps to regulate tokenized assets, market rules, and custody.

According to Bitwise CIO Matt Hougan, the industry sacrificed long-term certainty but gained better rules faster. The SEC has introduced an Innovation Exemption for certain tokenized-stock trading, while the CFTC sent its crypto-market rule proposal to the White House for review on September 18.

The CFTC also updated its FAQs to cover tokenized investments and blockchain recordkeeping on September 24. These moves show the SEC and CFTC acting through exemptions and proposed rules instead of waiting for Congress. The Congressional Research Service published an analysis on September 30 explaining which crypto activities banks may already carry out, highlighting that banks operate under existing rules and any guidance regulators issue.

The CLARITY Act's failure has led to a rally in the crypto market, with some arguing that faster agency action is beneficial despite the lack of long-term certainty. However, regulatory developments can change quickly, and the laws written by agencies may shift with future leadership, making it harder to undo than a statute.