SEC Prepares Independent Crypto Regulation as CLARITY Act Hits Senate Snags

The US Securities and Exchange Commission (SEC) is preparing its own path for crypto regulation as the CLARITY Act faces Senate delays. SEC Chair Paul Atkins says the agency can use existing powers to address regulatory gaps if Congress fails to act.

Atkins previously stated that the SEC and Commodity Futures Trading Commission can 'fill in the gaps' without a new law, but he emphasized that federal legislation is the stronger and more durable option. The SEC's Regulation Crypto Assets plan, introduced by Atkins in March, includes a token taxonomy and guidance on when an investment contract ends.

The CLARITY Act, which would divide digital asset oversight between the SEC and CFTC while setting federal rules for trading platforms, cleared the Senate Banking Committee by a 15-9 vote on May 14. However, Senate negotiations are ongoing due to disputes over stronger provisions covering government ethics, consumer protection, illicit finance, conflicts of interest, and market integrity.

August recess raises pressure on lawmakers to finalize the bill before the break. Atkins has stated that only Congress can fully 'future-proof' crypto rules through market structure legislation. The SEC's plan would address areas covered by federal securities law, including token fundraising exemptions, custody standards, and rules for securities trading on digital platforms.