The SEC and CFTC began moving to establish cryptocurrency rules under existing authority days after the Clarity Act failed a Senate procedural vote, as industry leaders and regulators signal they will no longer wait for Congress to act.
Federal regulators began moving independently to establish cryptocurrency rules within days of the Clarity Act failing to advance in the Senate, signaling that the industry's long-sought federal framework may now take shape through agency action rather than legislation.
Just two days after the Senate vote failed, the Securities and Exchange Commission expanded its crypto oversight under existing authority, issuing an order that creates a temporary pathway for trading certain tokenized stocks — a step that moves financial markets closer to around-the-clock trading.
On the same day, the Commodity Futures Trading Commission submitted a separate crypto rulemaking proposal to the White House for review. The details of that proposal were not made public, though a post by the Office of Management and Budget confirmed the rules were pending review.
CFTC Chair Michael Selig addressed the agency's posture in a Sept. 16 statement, saying, "President Trump promised to deliver a future-proof crypto asset regulatory market structure one way or the other, and we will help him get the job done using our existing statutory authorities."
An SEC spokesperson told reporters the agency will consider a proposal to "modernize the rules around custody of investment adviser client assets and fund assets, including to address crypto assets."
Coinbase CEO Brian Armstrong, a prominent advocate for the Clarity Act, made clear that the industry is not prepared to wait for Congress. "At this point, I don't think we can wait on Congress and the Senate," Armstrong told CNBC following the failed Sept. 15 procedural vote.
Senate Banking Committee Chairman Tim Scott, R-S.C., echoed that urgency, calling on federal agencies to set "clear rules of the road" for digital assets until Congress produces legislation.
Summer Mersinger, CEO of the Blockchain Association and a former CFTC commissioner, framed regulatory uncertainty as a barrier to institutional participation. "When you're thinking about traditional finance entering in and using some of this technology, they're being held back right now because there is this regulatory uncertainty," she said. "Having the regulators provide some sort of certainty is going to really open up the industry to more investment, more integration into traditional finance, and really grow the sector."
Caroline Pham, who served as acting CFTC chair from the start of President Trump's second term until December and is now CEO of MoonPay Institutional, told CNBC that contingency planning at the agency level had always been part of the strategy. "A plan B to move forward at the agency level was always in the cards," she said, adding that the CFTC and SEC factored that possibility into work conducted since Trump's second term began.
That work includes the "Project Crypto" initiative, introduced in July 2025, which aimed to modernize securities regulations and align the two agencies' crypto rules. In August 2025, Pham announced the CFTC would begin implementing recommendations from the President's Working Group on Digital Asset Markets.
The Clarity Act's path is not entirely closed. Sen. Thom Tillis, R-N.C., revised his vote to oppose the bill, a procedural maneuver that allows him to bring a motion to reconsider the legislation in the Senate.
States, meanwhile, are asserting their own interest in the regulatory space. A bipartisan coalition of state attorneys general sent a Sept. 14 letter to the Senate Banking Committee urging opposition to the Clarity Act, arguing the bill would displace states' authority to regulate securities markets and deprive them of tools to "protect the American people from predatory scammers."
Aaron Klein, a senior fellow in economic studies at the Brookings Institution and a former senior Senate banking committee staff member, offered a measured assessment of the state-versus-federal divide. "Capital market regulation, I think, needs to be done at the federal level," Klein said. "In terms of stopping fraud and scams, states have a lot of authority."
With midterm elections now dominating the congressional calendar, the burden of establishing a durable crypto regulatory structure has, at least for now, fallen to the agencies — underscoring how quickly the absence of legislation can accelerate the pace of executive action.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
More from Sara →Binance has agreed to invest $100 million in Circle Internet Financial, purchasing shares at $80.84 each as part of a five-year deal that grants USDC access to the exchange's global user base in a bid to challenge Tether's international dominance.
Kalshi filed Tuesday with the CFTC seeking approval to offer leverage on event contracts, a move the company says is critical to attracting institutional traders to regulated prediction markets. Access would be limited to self-clearing members meeting specific capital requirements.
Meta Platforms surged 12% on Monday as options traders flooded into the stock following strong early downloads of its Muse AI assistant, helping lift the S&P 500 to its best session since August 4.
Written for readers who already know the basics — markets, AI, and the policy decisions that shape both.