SEC Threatens to Regulate Crypto Without Congress

The U.S. Securities and Exchange Commission (SEC) is preparing to establish its own regulatory framework for digital assets if Congress fails to pass the CLARITY Act.

According to SEC Chair testimony before the Senate Banking Committee, the agency will craft separate rules to regulate digital asset markets if the legislation does not become law.

The CLARITY Act aims to clarify jurisdictional boundaries between the SEC and the Commodity Futures Trading Commission (CFTC) over digital assets and overhaul the regulatory framework for U.S. digital asset markets as a whole.

The bill's prospects for passage on the Senate floor are dim due to insufficient floor time and partisan disagreements over ethics provisions that would restrict senior government officials from engaging in digital asset businesses.