The Senate failed to pass the CLARITY Act on Tuesday, and now Bernstein expects the SEC and CFTC to write their own rules in response. The agencies will publish new regulations to make up for the time lost negotiating the bill, according to a Wednesday note shared with Cointelegraph.
Bernstein’s Expectation
Bernstein analysts expect “aggressive and swift” rulemaking from the two agencies. They said the regulators will publish new rules to compensate for the failure of the CLARITY Act, which would have “fool-proofed the industry against political regime shifts.”
The analysts said a re-vote of the act is unlikely. They cited a limited time window and concerns over the bill’s ethics provisions.
What the New Rules Will Cover
The analysts listed several areas where they expect new regulations:
- Token taxonomy for raising capital
- Developer protection measures concerning decentralized finance and self-custodial protocols
- Innovation exemptions for equity tokenization
- Faster approval times for real-world asset perpetual futures
- Amendments to rules around federal sports event contracts and their classification as swaps
The SEC’s Already Proposed Rule
On Aug. 19, the SEC proposed new rules to create a “clear and fit-for-purpose framework for certain investment contracts involving crypto assets.” The proposed rules allow entities to raise capital while preserving investor protections.
They offer crypto companies exemptions allowing the issuance of up to $5 million in tokens during four years and up to $75 million during 12 months. There is also a safe harbor exempting cryptocurrencies from being treated as “investment contracts.”
What SEC Chair Atkins Said
On July 27, SEC Chair Paul Atkins told CNBC that the agency was “ready, willing, and able to come out with rules” on digital assets if the Senate failed to pass the CLARITY Act.
That timing now looks prescient.
The Industry Loses Congressional Oversight
The CLARITY Act would have been the first regulatory framework for digital assets passed by the US. Its failure means the SEC and CFTC will set policy through administrative action rather than statute.
That is a significant shift. The agencies are writing rules to fill the gap created by the Senate’s failure to pass a law.
What This Means for Crypto Companies
The SEC’s proposed rule already offers exemptions for raising up to $75 million in tokens over 12 months. That is a meaningful opening for issuers.
But the analysts’ list of expected regulations suggests the SEC and CFTC will touch nearly every corner of the industry: capital raising, decentralized finance, tokenized equity, futures, and sports contracts. Each of those areas could see its own set of rules.
The Catch
The CLARITY Act was supposed to fool-proof the industry against political regime shifts. The agencies’ rules will not have that same guarantee.
What Comes Next
The SEC has already moved. The CFTC will likely follow.
The industry now faces a patchwork of agency rules rather than a single national framework.
Deutsche Bank awaits regulatory approval to launch institutional crypto custody solutions.
The irony is that the industry’s best shot at a stable, predictable framework failed. The CLARITY Act was that shot. It is now gone.
The SEC and CFTC will now fill the gap. The question is whether the rules they write will actually deliver the clarity the industry wanted.
Who is protecting what
The practical effect of the CLARITY Act’s failure is that the SEC and CFTC will now set policy through administrative rules rather than statute. That is a significant shift in how digital asset regulation gets made.
The paper suspects the agencies are moving quickly because they want to show the industry that the legislative route is closed. The analysts’ list of expected regulations covers nearly every corner of the sector — capital raising, decentralized finance, tokenized equity, futures, and sports contracts — and each area could get its own set of rules. The agencies are not just catching up; they are defining the field.
Ask yourself why the SEC and CFTC are acting so fast. The CLARITY Act was supposed to fool-proof the industry against political regime shifts; the agencies’ rules will not have that same guarantee. The irony is that the industry’s best shot at a stable, predictable framework failed. It is now gone. The question is whether the rules they write will actually deliver the clarity the industry wanted.
Get the Notebook.
The day's best stories and every fresh verdict, in plain English, in your inbox by seven. One email a day, no more.