Current Affairs Security BTC ETH

When Congress Gives Up, the Regulators Improvise: Why Crypto's Latest Win May Not Last

2026-09-20

Congress killed the Digital Asset Market Clarity Act on September 15 with a 50-49 vote. It was the end of months of negotiating and the industry's best shot at a comprehensive federal framework. No dice.

What the Clarity Act would have done: drawn a clean line between what the SEC regulates (securities) and what the CFTC regulates (commodities), then handed the CFTC actual supervisory power over crypto spot markets. Bitcoin and ether are legally commodities, but the spot markets where billions trade every day operate with almost no direct regulatory supervision. That gap was supposed to be filled. Now it's not.

Rather than wait for Congress to try again—and face the same wall of Democratic opposition and ethics concerns over Trump's personal holdings—the regulators have decided to build it themselves.

SEC Chairman Paul Atkins moved first, fast. Two days after Clarity died, he rolled out Regulation Crypto Assets: a dual-track system for tokenized securities. Issuers can now raise up to $5 million over four years with a blanket exemption, or up to $75 million annually under a separate framework. There's also a "safe harbor" that releases issuers once they stop making essential efforts to prop up their token's value. This sidesteps a decades-old problem in securities law.

Then came a technical rule in early September: blockchain data can now serve as an official record of who owns what. Essential for tokenized securities to trade on regulated platforms. Atkins has signalled more is coming—innovation exemptions for trading venues, custody guidance for investment advisers. The man is working.

The CFTC, under Mike Selig, is doing the same. In May they approved the first bitcoin perpetual futures contract for U.S. exchanges. Futures trading in crypto has happened for years, but almost entirely on offshore platforms beyond U.S. reach. Now it's here, supervised. Selig's also moving on a broader asset classification system.

Both agencies are coordinating through something called Project Crypto, developing taxonomies to sort which tokens are securities, commodities, or something else. This is genuinely novel. The SEC and CFTC have been known to fight turf wars for years. They're not doing that here.

The problem: none of this lasts unless Congress acts.

Agency rules can be overwritten by the next administration or junked if a court decides the agencies overstepped their statutory authority. Atkins knows this. He's said repeatedly that durable regulation "requires an act of Congress" and that rules built on existing authorities alone are vulnerable to reversal. He's being honest about his own work's impermanence.

Politics makes it worse. Democrats opposed Clarity over ethics concerns. Midterms are coming. If Democrats win the House, Maxine Waters could chair Financial Services. If they win the Senate, Elizabeth Warren could lead Banking. Neither is what you'd call crypto-friendly.

The SEC's formal rules are harder to reverse than guidance or exemptions—they'd require serious administrative lift. But legislation? That's durable. Rules are not.

What you get is a regulatory landscape in motion. Innovation is happening now, unlocked by executive action and agency muscle. The foundation, though, is provisional. Real progress shadowed by the threat of reversal whenever the political wind shifts. The Clarity Act's failure forced the regulators to act. It also left the industry perpetually contingent on the moment.

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