SEC's Narrow Rules Show Crypto Regulation Won't Be Sweeping
The recent failed CLARITY Act cloture vote in US Congress has been interpreted as a setback for crypto, but this reading misses the mark. DeFi compliance was never going to be clarified by this bill.
The industry treated CLARITY as the moment it would finally get regulatory certainty, but the bill was never designed to deliver that. It covered a lot of ground, including AML program requirements, protections for developers, and jurisdictional lines defining which agencies would regulate different kinds of cryptocurrencies.
The questions that determine how much DeFi stays open to anyone with a wallet and how much becomes gated by compliance checks will continue to be kicked down the road. The bill handed those specifics to agency rulemaking, and for AML-type screening, the relevant agency is Treasury.
The SEC has already shown what's coming in terms of regulation. Rather than writing one comprehensive framework, the agency has been issuing narrow, conditional rules one at a time, each with tight limits on who qualifies and how long the relief lasts.