SEC, CFTC Forge Ahead with Crypto Agenda Despite CLARITY Act Failure

The US regulatory environment has seen significant developments in recent days, with both the SEC and CFTC pushing forward with their own initiatives. The moves come after the CLARITY Act failed to pass Congress, but regulators have made it clear that they will continue to advance their agenda regardless of legislative action.

On September 17, the SEC introduced a five-year 'Innovation Exception' program aimed at making it easier for platforms to trade tokenized US stocks on-chain. The framework provides relief from some exchange requirements and offers temporary exceptions from dealer-registration rules for qualifying platforms. Tokenized stocks must still provide core shareholder rights, including dividends and voting rights, but synthetic products that track share price will be excluded.

The SEC's move is seen as significant, given the CLARITY Act setback. SEC Chair Paul Atkins previously stated that the agency would continue its crypto agenda regardless of Congressional action.

On Friday, the CFTC submitted 'Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets' to the White House Office of Information and Regulatory Affairs for review. The move marks the next step toward a formal crypto market framework under existing powers. Additionally, the CFTC issued a no-action position protecting certain software developers from being treated as introducing brokers when specific conditions are met.

Chair Michael Seling commented before the CLARITY vote that his agency would use existing authority to begin building a crypto market-structure regime regardless of legislative action.