CFTC and SEC Accelerate Crypto Rulemaking After Clarity Act Collapse

Key points

• The CFTC submitted its proposed rules to the Office of Information and Regulatory Affairs (OIRA) on Thursday, bypassing the stalled Clarity Act.
• The SEC released an 'innovation exemption' to facilitate onchain trading of tokenized stocks and issued a no-action position for software developers.
• The SEC's 'Regulation Crypto Assets' proposal, released in August, includes a startup exemption for raises up to $5 million and a fundraising exemption for up to $75 million.
• The Clarity Act failed a procedural Senate vote on Tuesday, with Democrats citing ethics concerns regarding the President's crypto holdings.
• CFTC Chair Michael Selig confirmed the agency would use existing authorities to establish a market structure for crypto assets if legislation stalled.

Background

This development follows the August 2026 announcement of the SEC's 'Regulation Crypto Assets' proposal and the CFTC's warning that it would utilize existing powers if Congress failed to pass the Clarity Act. Previous coverage noted bipartisan hurdles and industry concerns over regulatory ambiguity, which these new agency actions aim to address through executive rulemaking rather than legislative approval.

How outlets are covering it

The Block emphasizes the CFTC's proactive move to file rules with OIRA despite the Clarity Act's failure, highlighting the agency's intent to use existing authorities. Yahoo Finance frames the rapid succession of SEC and CFTC rules as a direct response to the legislative collapse, focusing on market impacts for assets like Bitcoin and XRP. Winston Taylor provides a detailed legal breakdown of the SEC's August proposal, noting its specific exemptions and safe harbors, while eciks.org focuses on the practical implications for investors and the pending public comment period. The sources generally agree that agencies are moving forward independently, but differ in emphasis: The Block focuses on the CFTC's filing, while Winston Taylor and eciks.org focus on the SEC's specific regulatory mechanisms.

Why it matters

The failure of the Clarity Act has shifted the burden of crypto regulation from Congress to federal agencies, potentially creating a fragmented regulatory landscape. The CFTC's filing with OIRA and the SEC's new exemptions signal a move toward a more defined, albeit potentially less comprehensive, regulatory framework. This could impact market structure, investor protections, and the ability of crypto firms to raise capital, while raising questions about the influence of the President's personal crypto holdings on regulatory decisions.

What to watch

The CFTC's rule is now under review by OIRA, while the SEC's 'Regulation Crypto Assets' proposal is open for public comment until October 20, 2026. The final rules may differ from the proposals, and the lack of comprehensive legislation could lead to further agency actions or legal challenges. Market participants will monitor the implementation of the SEC's exemptions and the CFTC's market structure rules.