SEC and CFTC Bypass Congress to Open Crypto Access After CLARITY Act Stalls
Two days after the US Senate failed to advance the CLARITY Act, federal regulators have bypassed Congress to open up access to crypto markets. The Securities and Exchange Commission (SEC) has created a five-year path for permissioned venues to trade tokenized US stocks through automated market makers.
The Commodity Futures Trading Commission (CFTC) has broadened staff no-action relief, allowing qualifying software providers to connect users to regulated derivatives markets without registering as introducing brokers. However, both routes have limitations and are not a permanent solution.
The SEC's order creates a new category called Tokenized Securities Venue (TSV), which allows qualified venues to bring buyers and sellers together through permissioned automated market maker liquidity pools. The TSV model is capped at 75 symbols for Tier 1 stocks, with no more than 0.25% of the prior month's average daily share volume in each relevant stock.
The CFTC's letter generalizes relief granted to Phantom, allowing passive software providers to connect users to regulated derivatives markets without registering as introducing brokers. However, the provider cannot hold customer assets or exercise discretion over order routing or execution.