Regulators look to existing powers after CLARITY Act stalls in Senate

The CLARITY Act, or H.R. 3633, failed to clear a procedural hurdle on September 15, recording 49 votes in favor and 50 against. The result fell 11 votes short of the 60 required to overcome a cloture motion, effectively stalling the bill as lawmakers remain deadlocked over ethics provisions and the scope of federal oversight. While the legislation aimed to formalize a division of responsibilities between the SEC and the CFTC, its absence does not preclude regulatory progress.

SEC Chairman Paul Atkins and CFTC Chairman Michael Selig are reportedly prepared to move forward with independent frameworks developed over the past several months. Giancarlo, often referred to as "CryptoDad" within the industry, noted that these leaders are determined to ensure financial innovation remains anchored within U.S. law. Industry figures, including Coinbase CEO Brian Armstrong and Ripple CEO Brad Garlinghouse, have echoed this sentiment, arguing that the market cannot wait for Congress to reconcile its internal disputes. Senate Banking Committee Chair Tim Scott also signaled that the agencies should now take the lead in setting clear rules of the road.

While the SEC has already proposed a comprehensive framework under "Regulation Crypto Assets" to allow for specific registration exemptions, the CFTC continues to refine its own market structure proposals. Although the bill remains on the Senate calendar—with some lawmakers suggesting a potential return during a post-election lame-duck session—the immediate path toward regulatory clarity rests with the chairs of the two commissions.