U.S. crypto regulation is increasingly shifting toward federal agencies as a sweeping market structure bill stalls in Congress, putting the SEC and CFTC in charge of advancing crypto rules that a future administration could more easily change or unwind.
The legislative impasse has increased pressure on regulators appointed by President Donald Trump to deliver the legal clarity crypto companies have sought for years, even as industry executives warn that agency-led rules will lack the permanence of legislation.
“The agencies … seemingly are ready to act, given that Congress has been unwilling or unable to do so,” Miller Whitehouse-Levine, CEO of the Solana Policy Institute, told Reuters.
Clarity Act delay shifts power to SEC and CFTC
The central issue is the stalled Clarity Act, which is meant to establish when digital assets fall under securities law, when they should be treated as commodities and which regulator has authority over different parts of the market.
Without that framework from Congress, the SEC and CFTC are increasingly relying on their existing powers to shape how crypto companies can issue tokens, trade products and operate in the U.S.
SEC Chair Paul Atkins has laid out broader plans to overhaul capital-market rules to accommodate cryptocurrencies, while CFTC Chair Michael Selig has approved perpetual bitcoin futures and is expected by industry executives to allow similar products tied to additional assets.
The Securities and Exchange Commission is working on a rule that could exempt certain token offerings from securities requirements, while the Commodity Futures Trading Commission is continuing to expand its approach to digital asset markets, according to the report.
Crypto rules remain vulnerable without legislation
Agency action by the SEC and CFTC can provide near-term clarity, but it lacks the permanence of legislation. The Clarity Act, which still needs Senate approval before it can become law, is meant to settle how digital assets are classified and divide oversight between the two regulators.
Josh Riezman, chief legal and strategy officer at crypto trading firm GSR, said agency action could help the industry in the short term, but warned that a political reversal could produce “a potentially Gensler 2.0 type scenario.”
A CFTC spokesperson also stressed the importance of legislation, saying the Clarity Act is crucial to establishing “durable” rules.
Crypto executives, however, are backing agency action as the best available path while Congress remains stalled.
“The agencies moving forward just shows this recognition of, we can’t just stand by and not do anything,” Blockchain Association CEO Summer Mersinger told Reuters. “That’s going to be really helpful and we applaud their work. But we need something permanent.”
Clarity Act faces September test in Senate
The Clarity Act is now stalled in the Senate after lawmakers left Washington for the August recess without bringing it to a vote. Senate Majority Leader John Thune has scheduled a key procedural vote for Sept. 15, when the bill will need 60 votes to advance.
Major obstacles include proposed ethics rules covering government officials’ crypto interests, tougher anti-money-laundering safeguards and restrictions around rewards paid on stablecoin holdings.
Democrats are pushing for stronger conflict-of-interest protections and enforcement provisions, while some Republicans and banking groups are focused on the risk that stablecoin rewards could pull deposits away from traditional lenders.
Even if the Senate clears those disputes and passes its version, lawmakers would still need to reconcile it with the House-passed bill before sending a final measure to President Donald Trump.
