Following the U.S. Senate's 49-50 procedural failure to advance the CLARITY Act on September 15, 2026, federal financial regulators have stepped in to issue their own rules. The SEC released a five-year "innovation exemption" on September 17 to allow onchain trading of tokenized stocks, while the CFTC issued a no-action position protecting crypto software developers from broker registration. The legislative collapse followed intense partisan disputes over ethics provisions linked to President Trump's family crypto holdings.
CLARITY Act Senate failure
- ▪The CLARITY Act (H.R. 3633) procedural vote on September 15, 2026, fell short of the 60 votes required to clear a procedural hurdle and begin Senate floor debate
- ▪The Digital Asset Market CLARITY Act failed to advance in the U.S. Senate on September 15, 2026, in a 49 to 50 procedural vote.
- ▪Four Republican senators—Susan Collins, Josh Hawley, Jerry Moran, and Thom Tillis—joined Senate Democrats in voting against advancing the CLARITY Act (H.R. 3633) in the Senate's September 15, 2026, procedural vote
SEC tokenized securities exemption
- ▪Under the Securities and Exchange Commission's Innovation Exemption, issued September 17, 2026, Tier 1 stocks on a Tokenized Securities Venue are limited to 75 symbols and 0.25% of average daily volume
- ▪The Securities and Exchange Commission released its five-year Innovation Exemption on September 17, 2026, to facilitate the onchain trading of tokenized stocks
- ▪The Securities and Exchange Commission's Innovation Exemption, issued September 17, 2026, runs through September 17, 2031, and creates a new category called a Tokenized Securities Venue
CFTC software developer relief
- ▪The Commodity Futures Trading Commission issued a "no-action position" on September 17, 2026, protecting qualifying software developers from broker registration enforcement.
- ▪The Commodity Futures Trading Commission's September 17, 2026, developer relief generalizes a March 2026 no-action letter previously granted specifically to wallet provider Phantom.
- ▪The Commodity Futures Trading Commission's staff-level developer relief is revocable and requires software providers to remain passive without holding customer assets.
- ▪The Commodity Futures Trading Commission submitted a proposed rule titled "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets" to the White House on September 17, 2026.
Regulatory authority versus legislation
- ▪The CLARITY Act (H.R. 3633) would have established statutory divisions of authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission
- ▪Industry sources favor legislation over agency actions because legislation offers a level of permanence that regulatory exemptions and no-action letters cannot guarantee.
- ▪The Commodity Futures Trading Commission currently operates with Michael Selig as its sole confirmed commissioner, leaving him as the agency's only voting member.
Democratic ethics concerns
- ▪Democratic lawmakers raised concerns that passing the CLARITY Act could potentially boost President Donald Trump and his family's private cryptocurrency businesses.
- ▪Senate Democrats blocked the CLARITY Act (H.R. 3633) in the September 15, 2026, procedural vote after failing to reach an agreement with Republicans on ethics provisions concerning elected officials' digital asset interests
- ▪Senate Republicans offered a White House-backed ethics provision on September 13, 2026, which Democrats rejected as containing too many loopholes.
Partisan divide over crypto
- ▪Traditional financial firms, including Citadel Securities, have expressed concern over the Securities and Exchange Commission's plan, previewed by SEC Chairman Paul Atkins, to allow stock trading through crypto technology
- ▪Congressional Democrats have expressed deep reservations over Securities and Exchange Commission Chair Paul Atkins and Commodity Futures Trading Commission Chair Michael Selig acting unilaterally to issue crypto rules through their agencies' existing authority after the CLARITY Act failed to advance in the Senate
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