SEC, CFTC Move Unilaterally on Crypto Rules Days After Clarity Act's Senate Defeat

Two days after the Clarity Act failed its Senate cloture vote, the SEC and CFTC each issued crypto-market relief within hours of one another on Thursday, following through on promises both chairs made a day earlier to write crypto rules using their existing authority rather than wait for Congress.

SEC Chair Paul Atkins said Wednesday that "with or without legislation, we will act decisively within the SEC's statutory authority to deliver certainty for American investors, while CFTC Chair Mike Selig said his agency was "locked in and ready to ship its rules for the new frontier of finance."

The SEC's order, issued Thursday, grants a five-year exemption letting Tokenized Securities Venues trade tokenized versions of NMS-listed stocks through permissioned automated market makers and liquidity pools without registering as traditional exchanges. The relief carries conditions: tokenized shares must carry identical rights to their traditional counterparts, trading must halt whenever the primary listing exchange halts, smart contracts must be public, auditable and deployed on permissionless ledgers, and venues must publicly disclose their operations and trading activity. Atkins called the move a step to bring US markets onchain "within its statutory authority," and the SEC is taking public comment on the exemption as it weighs permanent rulemaking.

The CFTC's Market Participants Division separately said it would not recommend enforcement action against passive software providers, or their personnel, for failing to register as introducing brokers, so long as their software only facilitates trades routed to registered futures commission merchants, introducing brokers and designated contract markets, and the providers neither custody user funds nor make trading decisions on users' behalf. The position builds on a narrower no-action letter the CFTC had issued to Phantom Technologies, the self-custodial wallet developer, and extends the same protection to any qualifying software provider. Phantom co-founder Brandon Millman said "the CFTC has opened that same path to other software providers, and that's a win for the whole industry," while Coinbase vice chair Ryan VanGrack said "after years of regulatory standstill, we just saw meaningful relief in a matter of hours," according to PYMNTS' reporting on the relief.

Markets read both moves as a signal that crypto's regulatory path in the US no longer runs solely through Congress. Uniswap's UNI token, which stands to benefit from software providers gaining clearer legal footing to build interfaces on top of DeFi protocols, rose 17% over the following 24 hours to $7.19, according to CoinGecko, though the token's gains that day were also tied to new integrations with Circle's Arc network and Robinhood's forthcoming chain. Both the SEC exemption and the CFTC's no-action position stop short of the durable, statute-backed framework the Clarity Act would have provided, and each remains exposed to reversal by a future administration or a legal challenge, a gap that pushed both chairs to frame their actions as bridges rather than substitutes for legislation.