After the CLARITY Act Stall, the SEC and CFTC Move on Crypto Rules Alone
Two days after the Senate blocked the CLARITY Act, the SEC opened a five-year path for tokenized stocks and the CFTC sent its crypto market rulemaking to the White House for review.
US crypto policy shifted gears this week. After the Senate failed to advance the CLARITY Act on September 15, the country's two main market regulators made clear they do not intend to wait for Congress. Within 48 hours, the Securities and Exchange Commission issued a long-anticipated exemption for tokenized stocks, and the Commodity Futures Trading Commission sent a crypto market rulemaking to the White House for review.
A Senate Setback Sets the Stage
The CLARITY Act, a market structure bill designed to define how digital assets are classified and supervised, fell short in a cloture vote on Tuesday. The 49–50 result was far below the 60 votes needed to proceed. The legislation would have given the CFTC primary authority over digital asset spot markets, and with Congress heading toward recess, it is effectively on hold.
Both agency chairs had signaled in advance that a failed vote would not end the discussion. CFTC Chair Michael Selig said the commission was ready to ship rules using its existing authority, while SEC Chair Paul Atkins said the securities regulator would move forward with or without legislation.
The SEC Opens a Five-Year Path for Tokenized Stocks
On Thursday, the SEC issued its Innovation Exemption, an order that took effect immediately. It creates a regulatory pathway for certain trading venues to offer tokenized versions of publicly traded US stocks. Eligible platforms, described as Tokenized Securities Venues, can operate for five years under set conditions without registering as national securities exchanges. They may use permissioned automated market makers and liquidity pools on public blockchains.
The central safeguard is that holders of a stock token must receive the same rights and privileges as holders of the equivalent traditional share. That requirement effectively rules out simple synthetic products that only track a stock's price. Atkins described the step as an effort to bring America's capital markets into the digital age within the agency's existing statutory authority.
The exemption is not a formal rulemaking. It works as a supervised test that could inform permanent rules, and it points toward the possibility of round-the-clock stock trading. Several large crypto platforms already offer tokenized stocks in offshore markets, but not to US customers.
The CFTC Sends Its Own Plan to the White House
The same week, the CFTC's rulemaking, titled Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets, was received by the White House Office of Information and Regulatory Affairs on September 17. It sits at the prerule stage and its text has not been made public, so nothing is in force and no new compliance deadlines exist.
The filing follows Selig's remarks in August that the agency would build a crypto market regime under existing authority if Congress stalled. Under that concept, current registrants and unregistered crypto exchanges could be designated as a type of designated contract market, a "crypto asset market," where leveraged or margined crypto trading would take place under CFTC oversight.
What It Means for the Market
Investors appeared to take the news in stride. Bitcoin was trading above $80,000 in the days after the vote, even with higher interest rates weighing on risk assets.
The longer-term picture is more nuanced. Agency action can move faster than legislation, but it is also less durable. Industry participants have voiced concern that measures built without a statute could be reversed by a future administration or challenged in court. The key things to watch are the outcome of the White House review of the CFTC filing, how many platforms adopt the SEC exemption, and whether Congress returns to market structure legislation after
