US Crypto Regulation in Limbo After CLARITY Act Fails
The US crypto regulation landscape remains uncertain after the failure of the CLARITY Act in September. The bill, which aimed to split oversight between the SEC and CFTC, stalled due to a lack of votes. Despite this setback, existing laws still apply, and regulators are filling gaps through proposals, exemptions, and staff guidance.
The SEC focuses on investment contracts, with its March 2026 release stating that digital commodities, collectibles, tools, and many stablecoins are generally not securities on their own. Tokenized stocks and some token sales can be subject to securities laws, however. The agency has also proposed Regulation Crypto Assets, which would allow a startup exemption of up to $5 million over four years and a fundraising exemption for up to $75 million in 12 months.
The CFTC oversees derivatives such as futures, treating Bitcoin as a commodity since its inception. It recently gave conditional no-action relief to passive software providers connecting users to registered derivatives markets. The agency is also awaiting White House review of a wider crypto rulemaking proposal that was sent in September.
FinCEN enforces the Bank Secrecy Act, requiring businesses moving money for customers, including many exchanges, to register as money services businesses and run anti-money laundering programs. The IRS treats crypto as property for tax purposes, with selling, swapping, or spending it potentially creating a taxable gain or loss. OFAC, part of the Treasury Department, enforces sanctions that also apply to crypto transfers.
The split between the SEC and CFTC often starts with whether a token is a security or a commodity, determining registration, disclosure, and trading rules. A patchwork of agencies oversees different aspects of the market, with states adding licensing and enforcement on top.