Regulatory Shift: Agencies Take Lead as CLARITY Act Stalls

The CLARITY Act's failure to advance in the U.S. Senate on September 15 has shifted the focus of crypto regulation from Congress to federal agencies.

The procedural vote fell short of the 60 votes required, but it was not a final rejection of the bill. Revisions and another vote remain possible, although passage this year looks increasingly difficult due to disputes over political conflicts of interest, stablecoin rewards, and investor protection.

Under existing authority, the SEC and CFTC plan to act, with SEC Chairman Paul Atkins stating that the agency will do so 'with or without legislation.' CFTC Chairman Michael Selig said his agency is ready to ship its rules. Charley Cooper of Ava Labs expects rules to need six-plus months before taking shape.

Agency action lacks the permanence of legislation and remains open to court challenges and policy reversals. The industry reaction has been mixed, with some panelists calling the vote a setback but not a terminal failure.