Clarity Act Defeat Hands SEC and CFTC the Lead on U.S. Crypto Rules

• The U.S. Senate failed to advance the Clarity Act on September 15, 2026, in a 49-50 procedural vote, 11 votes short of the 60 required.
• Within 48 hours, the SEC issued an “Innovation Exemption” for onchain trading of tokenized stocks, and the CFTC sent a crypto markets rulemaking to the White House for review.
• With the Senate largely out of session in October, regulators now set the pace on U.S. crypto rules for the rest of 2026.

The Clarity Act defeat in the U.S. Senate has moved control of American crypto policy from Congress to federal regulators. Senators voted 49-50 on Tuesday, September 15, on a procedural motion to advance the bill, falling 11 votes short of the 60 required. Within 48 hours, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) each announced new crypto measures under their existing powers.

The Digital Asset Market Clarity Act would have divided oversight of digital assets between the SEC and the CFTC, a framework we detailed in our explainer on what the CLARITY Act proposes. Democrats voted as a bloc against the motion, and Republican Senators Susan Collins, Josh Hawley, and Jerry Moran joined them. Senator Thom Tillis initially voted yes before switching to no, a procedural maneuver that preserves the option of bringing the bill back later. Seven Democrats who had negotiated on the bill described the outcome as “a setback, but not the end.”

Regulators Step In After the Clarity Act Defeat

The heads of both agencies responded the following day. “The CFTC is locked in and ready to ship its rules for the new frontier of finance,” CFTC Chairman Michael Selig posted on X on September 16. SEC Chairman Paul Atkins posted the same day that “with or without legislation, we will act decisively within the SEC’s statutory authority.”

On Thursday, September 17, the SEC issued an order granting temporary, conditional exemptive relief to Tokenized Securities Venues (TSVs). The order lets these venues trade tokenized National Market System (NMS) stock using permissioned automated market makers and liquidity pools. In an accompanying statement, Atkins tied the timing directly to the Senate vote, writing that Congress “was unsuccessful in advancing the CLARITY Act despite the tireless efforts of many.”

“The Innovation Exemption, while temporary, would allow TSVs to trade tokenized NMS stock in a permissioned environment today while the Commission considers the need for additional action to facilitate onchain trading,” Atkins said. The exemptions expire five years after publication, and synthetic instruments fall outside their scope, according to advisory firm Richey May.

CFTC Sends Crypto Rulemaking to the White House

The CFTC moved on two fronts the same day. Its Market Participants Division issued a no-action position stating that staff will not recommend enforcement against qualifying passive software providers for failing to register as introducing brokers. The relief applies to software that facilitates user trading with registered futures commission merchants, introducing brokers, and designated contract markets. It mirrors the position granted under Staff Letter 26-09 and now applies broadly to such providers.

The CFTC also submitted a crypto markets rulemaking, titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,” to the White House Office of Information and Regulatory Affairs (OIRA) for review. The agency has not disclosed which crypto assets, exchanges, or activities the rules would cover. Once OIRA completes its review, the CFTC can publish the proposal for public comment.

Before the vote, Selig had said the CFTC would proceed with crypto rulemaking whether or not the Clarity Act became law, with the aim of finalizing rules before the end of the current administration, according to a policy tracker from law firm Paul Hastings.

For now, the path back to a Senate floor vote looks narrow. The chamber is scheduled to be out of session for nearly all of October ahead of the November 3 midterm elections, which leaves the SEC and CFTC setting the pace on U.S. crypto rules for the rest of 2026.

Editorial Note: Reported and edited by the Crypto India Magazine editorial team. We use AI tools to assist with research and drafting; every article is reviewed and fact-checked by our editors.

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