SEC and CFTC pledge crypto rules without Congress after Clarity Act fails

SEC Chair Paul Atkins and CFTC Chair Mike Selig pledged on September 16 to advance crypto regulation using existing agency authority after the Senate failed to advance the Clarity Act. The agencies are shifting the regulatory path from legislative to administrative, a move that brings rules faster but leaves them vulnerable to reversal by future administrations. Selig said the agency would help President Donald Trump deliver a crypto regulatory framework "using our existing statutory authorities" and stated "Americans deserve regulatory clarity, legal certainty, and consumer protections in crypto asset markets." Atkins posted on the same day: "I have been unequivocal: with or without legislation, we will act decisively within the SEC's statutory authority to deliver certainty for American investors and for the entrepreneurs shaping our technological future," according to Decrypt. The Senate voted 49-50 on a procedural motion to advance the Clarity Act on September 16, falling short of the 60 votes required to proceed, according to Decrypt. All 49 votes to proceed came from Republicans, per The Defiant. The bill would have established a federal framework for crypto markets and clarified the responsibilities of the CFTC and Securities and Exchange Commission. Selig outlined plans in August, directing staff to explore rules covering crypto exchanges and trading with borrowed funds, according to Decrypt. Selig also asked staff to work with developers on ways for blockchain-based finance protocols to operate legally in the United States. In a statement posted at 10:35 a.m. ET on September 16, Selig said: "The outcome of yesterday's Senate vote was unfortunate. President Trump promised to deliver a future-proof crypto asset regulatory market structure one way or the other, and we will help him get the job done using our existing statutory authorities," per The Defiant. Atkins directed staff to develop rules on crypto asset transfers through proposed transfer agent rules, according to The Defiant. Atkins also asked staff to develop a custody proposal allowing investment advisers to self-custody crypto assets and use state trust companies as custodians. On self-custody, Atkins stated: "As to self-custody, yes, because for too many assets a qualified third-party custodian simply does not exist yet," per The Defiant. The SEC released its proposed Regulation Crypto Assets on August 21, which would create two exemptions from Securities Act registration for crypto asset offerings: up to $5 million over four years, and up to $75 million in any 12 months, per The Defiant. Regulation Crypto Assets includes a conditional safe harbor under which a crypto asset would be deemed not subject to an investment contract for the purposes of the securities definitions. Comments on the proposed rule close October 20. Selig had signaled in late July that the SEC would act if the Clarity Act should fail, saying at the time the Commission was "ready, willing, and able" to write crypto rules if Congress did not, according to Decrypt. Atkins used similar language at the Solana Policy Institute's summit on September 14: "With or without that legislation, this Administration will deliver for American investors and technological innovators. Promises were made, and they will be kept," per The Defiant. Selig told the CFTC's Innovation Advisory Committee on August 20 that "if CLARITY continues to stall because of Democratic obstruction, the CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets," according to The Defiant. Selig directed staff to explore rules letting current registrants and non-registrant crypto exchanges be designated as a type of designated contract market called a crypto asset market, and offer crypto trading on a leveraged or margined basis. Selig also directed staff to engage with onchain protocol developers. The CFTC has sent 18 proposed rules and requests for comment to the Federal Register since January, according to The Defiant, covering prediction markets, event contract data, compute derivatives, 24/7 futures and perpetuals on energy commodities, swaps definitions, portfolio margining and commodity pool registration. However, the crypto market structure rules Selig described in January and August are not among the 18 rules sent to the Federal Register, per The Defiant. However, Selig indicated in August that he prefers legislation because it would make the framework "harder for future administrations to reverse," according to Decrypt. The Supreme Court overturned Humphrey's Executor on July 1, removing the for-cause protection that had shielded SEC and CFTC commissioners from removal by the president, per The Defiant. Any rule either agency adopts goes through notice and comment, and a later chairman can propose to rescind it through the same process, whereas repealing a statute takes another act of Congress, per The Defiant. The SEC has only three sitting commissioners against five seats, leaving three vacancies, per The Defiant. Hester Peirce's term expired in 2025, though commissioners may serve up to 18 months past expiry. The CFTC has only one sitting commissioner, with four vacancies open to future appointment, according to The Defiant. Selig was sworn in on December 22, 2025 as the 16th chairman. Polymarket priced the CLARITY Act being signed into law in 2026 at 6.6% on September 16 afternoon, flat over 24 hours on $21.3 million of cumulative volume, per The Defiant. The prediction had read 19.5% on September 16 morning, before the vote.