USDSEC Advances Crypto Rulemaking as CLARITY Act Stalls
Regulators Move Ahead While Senate Faces September Test
TL;DR
- The SEC will vote on August 14 on whether to propose Regulation Crypto, a tailored offering framework for certain digital-asset investment contracts.
- The CLARITY Act remains stalled in the Senate, where a procedural cloture vote is scheduled after lawmakers return from recess.
- The SEC and CFTC are separately preparing rules under existing authority while congressional negotiations continue.
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The U.S. Securities and Exchange Commission will vote on August 14 on whether to propose Regulation Crypto, a new framework that could give qualifying crypto companies a tailored route to raise capital without completing full securities registration. The vote would begin a rulemaking process rather than approve a final rule, while the broader CLARITY Act remains stalled in the Senate.
The SEC’s open meeting is scheduled for 10 a.m. ET at its Washington headquarters and will be available through a live webcast. The agenda contains a single item from the Division of Corporation Finance concerning an offering framework for investment contracts tied to digital assets. Regulation Crypto would mark the first major crypto rulemaking under SEC Chair Paul Atkins.
Qualifying projects could use exemptions rather than full securities registration under the proposal. The framework has also been described as potentially allowing tokens to move out of securities status once their networks become sufficiently decentralized that no single company or team remains in control.
The proposal grew out of Project Crypto, the regulatory package Atkins placed on the SEC’s 2026 agenda. The package includes registration exemptions for token sales, safe harbors for projects progressing toward decentralization and custody standards for broker-dealers.
Attorney Anne Kelley said a favorable Commission vote would only start the formal process. A proposal would still need a public comment period, economic analysis, possible revisions and a separate final vote. Kelley said major SEC rules have typically taken 12 to 18 months from proposal to completion, while calling the agency’s decision to move forward “welcome progress.”
Crypto investor Mark Chadwick said the earlier regulatory framework could eventually allow projects to sell tokens to buyers who expect profits from a team’s work without requiring the full burden of IPO-style registration.
Coinbase’s chief policy officer, Faryar Shirzad, said the effort showed that “the work of bringing clear rules to digital assets isn’t waiting on Congress.”
Atkins has also said the SEC is prepared to act without legislation even though he favors a statutory framework. “Statute is the way to future-proof something,” Atkins said in a late-July interview.
SEC and CFTC Build Parallel Crypto Framework
The SEC’s latest move follows joint work with the Commodity Futures Trading Commission earlier this year. The two agencies issued a joint interpretation in March that established a five-category token taxonomy and addressed when a crypto investment contract begins and ends.
That joint interpretation classified most tokens outside securities law and carved out staking, mining and airdrops. The agencies’ broader approach combines asset classification with new regulatory pathways for token offerings that remain within securities jurisdiction.
Atkins has separately signaled that the SEC is close to unveiling an “innovation exemption” that could allow tokenized versions of stocks to trade around the clock on blockchain platforms. The scope and timing of that proposal remain under wraps.
CFTC Chair Michael Selig has taken a similar approach to congressional delays. Selig said regulators could end up writing crypto rules themselves if Congress fails to act, while continuing to urge lawmakers to pass comprehensive legislation because federal certainty is important for businesses.
CFTC Chairman Michael Selig has also said the agency already has proposed rules prepared and intends to proceed whether or not Congress passes the CLARITY Act. Selig said he and Atkins are prepared to write joint rules defining which regulator controls different parts of the crypto market through the Project Crypto effort.
The CFTC’s new Innovation Advisory Committee is also scheduled to hold its first meeting on August 20. Representatives include Coinbase, Ripple, Robinhood, Kraken, Gemini, Polymarket, Kalshi, CME and Nasdaq.
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CLARITY Act Faces Senate Procedural Hurdle
The Digital Asset Market Clarity Act remains the broader congressional effort to establish a statutory division of digital-asset oversight between the SEC and CFTC. The measure cleared the House with bipartisan support in 2025 but had not reached a substantive Senate floor vote before lawmakers left for the August recess.
Under the framework described for the legislation, most established crypto assets, including bitcoin and ethereum, would be treated as commodities under CFTC authority. The SEC would retain responsibility for securities offerings and cases involving companies raising money from investors who expect profits based on the work of others.
Senate Majority Leader John Thune filed cloture on the motion to proceed before lawmakers left Washington. The Senate is scheduled to return on September 14, with the cloture vote set for September 15.
Cloture requires 60 votes to end the procedural blockade and advance toward debate. It does not pass the legislation. Republican leadership therefore needs Democratic support, which had not materialized when the reports were published.
The congressional calendar adds further pressure. The Senate is expected to be away for much of October ahead of the November 3 midterm elections, leaving lawmakers with a narrow window to resolve outstanding disputes.
Bill sponsor Cynthia Lummis expressed frustration after the earlier delay. “You all know me and how long and hard I’ve fought for this bill, so you know how frustrated I am,” Lummis said.
Negotiators remain divided over stablecoin yield provisions, protections for software developers and ethics rules for public officials involved in crypto.
Republicans Josh Hawley and Jerry Moran objected to the bill’s stablecoin yield language and sided with concerns raised by community banks. Banking groups have argued that crypto reward programs resembling interest payments could pull deposits away from conventional savings accounts.
The sources also describe fintech banks and specialized charters as prepared to serve customers seeking those crypto-linked reward products.
Another dispute involves ethics provisions connected to President Trump’s crypto holdings. President Trump said he was not opposed to a blind trust but objected to being treated differently from other lawmakers.
Grayscale research head Zach Pandl said passage of the CLARITY Act looks unlikely in 2026. Grayscale has separately argued that regulators can still address custody, tokenized securities and trading rules under existing authority if Congress fails to complete the legislation.
Michael Saylor said Bitcoin does not need CLARITY even if the country does.
Supporters of the CLARITY Act argue that a statutory split between the SEC and CFTC would give exchanges, custodians and token issuers a more predictable regulatory framework. Detractors, including many Democrats, argue the proposed rules are not strict enough and leave loopholes.
The immediate regulatory sequence now turns first to the SEC’s Regulation Crypto proposal, followed by the Senate’s procedural test of whether the CLARITY Act can advance.
FAQ
What would Regulation Crypto change?
It could give qualifying token issuers an exemption-based route to raise capital without full securities registration.
Would the SEC vote finalize the rule?
No. A favorable vote would begin the formal proposal and public-comment process.
What does the CLARITY Act do?
It would divide digital-asset oversight between the SEC and CFTC through federal legislation.
Why does the Senate vote matter?
Cloture determines whether the bill can advance toward debate and eventual consideration.
This article has been refined and enhanced by ChatGPT.
