Following the Senate's 49-50 defeat of the CLARITY Act on September 15, 2026, SEC Chairman Paul Atkins and CFTC Chairman Michael Selig pledged to independently write cryptocurrency rules using their existing statutory authorities. While the failed bill aimed to formally divide oversight, Democrats blocked it over concerns that its ethics provisions did not sufficiently restrict public officials' crypto interests. JPMorgan analysts warn that agency-written rules are less durable than legislation and remain vulnerable to court challenges or reversal by future administrations.
Senate CLARITY Act failure
- ▪The CLARITY Act aimed to divide digital asset oversight between the SEC and CFTC, establish registration paths for crypto platforms, set ethics limits on officials issuing digital assets, and grant Treasury authority over payment stablecoins.
- ▪Senate Democrats opposed the CLARITY Act cloture motion because they argued its ethics title did not sufficiently restrict public officials' crypto dealings, including those tied to President Donald Trump's reported family crypto income.
- ▪The U.S. Senate blocked the Digital Asset Market Clarity Act (H.R. 3633) on September 15, 2026, in a 49-50 cloture vote that fell 11 votes short of the 60 needed to advance the bill.
- ▪All Senate Democrats present voted against the CLARITY Act cloture motion, while four Republicans—Susan Collins, Josh Hawley, Jerry Moran, and Thom Tillis—also voted no, with Tillis doing so procedurally to preserve a motion to reconsider.
SEC independent rulemaking commitment
- ▪SEC Chairman Paul Atkins announced on September 16, 2026, that the agency will act decisively within its existing statutory authority to deliver regulatory certainty for investors and entrepreneurs with or without legislation.
- ▪SEC Chairman Paul Atkins has asked staff to develop a custody proposal allowing investment advisers to self-custody crypto assets and utilize state trust companies as custodians.
- ▪The SEC's proposed Regulation Crypto Assets, which creates two registration exemptions for token offerings and a conditional safe harbor, was published on August 21, 2026, and remains open for public comment until October 20, 2026.
CFTC independent rulemaking commitment
- ▪CFTC Chairman Michael Selig directed staff in August 2026 to explore rules allowing crypto exchanges to be designated as a type of contract market and to permit leveraged or margined retail crypto trading.
- ▪The CFTC has not yet sent any crypto market structure rules to the Federal Register in 2026, instead relying on staff advisories, FAQs, and no-action letters to manage digital asset activities.
- ▪CFTC Chairman Michael Selig announced on September 16, 2026, that the agency is ready to ship its rules for crypto asset markets using its existing statutory authorities to help President Donald Trump deliver a regulatory framework.
Agency authority versus legislation
- ▪JPMorgan analysts noted that agency rulemaking is less durable than legislative statutes because administrative rules can be repealed by subsequent administrations or overturned in court, whereas repealing a statute requires an act of Congress.
- ▪The SEC currently has only three sitting commissioners out of five seats, while the CFTC has only one sitting commissioner, Chairman Michael Selig, leaving four vacancies at the derivatives regulator.
Former regulator reactions
- ▪Former CFTC Chairman J. Christopher Giancarlo stated at the Avalanche Summit on September 16, 2026, that the Senate's failure to pass the CLARITY Act is disappointing but will not stop the march of financial innovation in the U.S.
- ▪Former SEC Commissioner Troy Paredes noted during a panel discussion at the Avalanche Summit that good faith disagreements naturally arise regarding the legal interpretation of existing digital asset regulations.
Debatable claims
- ▪The SEC and CFTC should regulate crypto using their existing authority
- ▪The CLARITY Act should have imposed stricter ethics limits on public officials' crypto dealings
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