SEC Prepares Backup Plan for Crypto Regulations If Clarity Bill Fails

The U.S. Securities and Exchange Commission (SEC) has made it clear that they are prepared to draft their own regulatory framework for cryptocurrencies if the proposed CLARITY bill fails to pass through Congress.

This move signals a potential shift in the agency's approach to digital asset oversight, moving from enforcement-based actions toward formal rulemaking.

The SEC has relied heavily on enforcement actions against crypto firms, often using the Howey Test to determine whether a token qualifies as a security. However, if the CLARITY bill fails, the SEC will take matters into its own hands by drafting its own set of rules.