The CLARITY Act Stalled In The Senate. Now US Regulators Are Moving Ahead On Crypto Rules Without Congress.

U.S. financial regulators are moving ahead with parts of a cryptocurrency rulebook under their existing authority after the Senate failed to advance legislation designed to establish a broader federal framework for digital assets.

The Securities and Exchange Commission and Commodity Futures Trading Commission began taking new steps within days of the Sept. 15 Senate vote on the Digital Asset Market Clarity Act. The bill fell short of the 60 votes needed to advance, leaving unresolved questions over how responsibility for digital assets should be divided between the two agencies.

The Senate vote was 50-49 in favor of advancing the legislation, short of the required threshold, with four Republicans joining Democrats in opposition. Sen. Thom Tillis, R-N.C., changed his vote for procedural reasons, preserving the ability to seek reconsideration of the measure.

Two days after the vote, the SEC granted temporary, conditional relief allowing certain venues to trade tokenized versions of stocks listed on U.S. exchanges. Under the agency's "Innovation Exemption," qualifying Tokenized Securities Venues can use automated market makers and liquidity pools without being treated as exchanges under existing securities law, subject to a series of conditions.

The exemption applies to tokenized National Market System stocks that provide investors with the same rights as the underlying traditional securities, including voting and dividend rights. Synthetic products that merely track a stock's price without providing ownership rights are not covered. The relief lasts five years, the SEC said.

SEC Chairman Paul Atkins directly linked the move to the failure of the CLARITY Act, saying the commission was acting within its existing statutory authority after Congress was unable to advance the legislation. The agency has been working on a broader crypto regulatory program through Project Crypto, which it launched in 2025 to update securities rules for blockchain-based financial markets.

The CFTC has been moving separately. The agency submitted a crypto rulemaking proposal to the White House Office of Management and Budget for review two days after the Senate vote. Details of the proposal have not been made public, but its submission was confirmed through the federal regulatory review system.

The proposal still has to go through the federal rulemaking process. Following White House review, it would return to the CFTC and go through additional steps including public comment before a final rule could take effect, CoinDesk reported.

CFTC Chairman Michael Selig said after the Senate vote that the agency would use its existing statutory powers to continue its work on digital assets. The commission has also provided no-action relief for certain software providers that connect users with regulated derivatives markets without registering as introducing brokers, subject to restrictions on activities including holding customer assets and controlling order execution.

The agencies' moves follow a lengthy congressional effort to establish a statutory framework for the crypto market. The Senate Banking Committee advanced the CLARITY Act in May in a 15-9 vote after months of negotiations. The legislation sought to define the roles of the SEC and CFTC and establish federal rules governing digital-asset markets.

The bill had support from major parts of the cryptocurrency industry, which has spent heavily on political campaigns and lobbying for digital-asset legislation. Its defeat in the Senate marked a setback after the industry spent more than $300 million supporting candidates in recent election cycles.

The federal push is unfolding alongside a separate dispute over how much authority states should retain over crypto markets. A bipartisan coalition of 18 state attorneys general urged the Senate before the vote to preserve state enforcement powers, arguing that the CLARITY Act as written would restrict their ability to pursue cryptocurrency fraud and scams.

New York Attorney General Letitia James, who led the coalition, said states needed to retain the tools they use to protect investors. The group argued in a letter to Scott and Sen. Elizabeth Warren, the committee's ranking Democrat, that federal legislation should not displace states' existing securities enforcement powers.