While CLARITY Stalls, US Regulators Are Rewriting Crypto’s Rulebook One Action at a Time

November 8, 2026 MM Crypto Team

For years, the crypto industry in the United States has waited for one big law to settle the biggest question in the market: who regulates digital assets, and under what rules. That wait continues. Yet while Congress debates, the rulebook is already being rewritten in smaller pieces, by different agencies, on different timetables, and with very different legal weight.

The latest turning point came in the autumn, when the Senate declined to advance the market-structure bill known as the CLARITY Act. On September 15, the Senate rejected cloture on the motion to proceed to H.R. 3633 by a 49-50 vote. Congress could still revive CLARITY before the January 3 transition, when the new Congress convenes, but the vote made one thing clear: Washington is no longer waiting for a single comprehensive crypto market-structure law.

US crypto regulation after the CLARITY Act cloture vote

The CLARITY Act was designed to be the comprehensive answer. Market-structure legislation, in plain terms, is meant to draw the lines between different kinds of digital assets, assign each line to a regulator, and set out the registration, disclosure and trading rules that apply on either side. Supporters argue that such clarity would let legitimate businesses build in the United States with confidence, let investors know which protections apply to them, and let enforcement focus on genuine misconduct rather than arguments about jurisdiction.

The September 15 vote stopped the bill from advancing at that moment. Cloture is the procedural step that allows the Senate to move forward to debate and a vote on a measure, and falling short left the bill parked. The closeness of the vote is part of the story: the bill was not defeated by a wide margin, and the possibility that Congress could still revive CLARITY before the January 3 transition remains open.

The SEC Innovation Exemption and tokenized securities

The most striking example arrived just two days after the unsuccessful cloture vote. The SEC’s September 17 Innovation Exemption offered conditional relief for qualifying tokenized-securities venues and certain proprietary liquidity providers. In ordinary language, an exemption is permission to operate outside a particular rule, or set of rules, under defined conditions. Tokenized securities are traditional securities, such as shares or bonds, represented as tokens on a blockchain, and the venues that trade them face a thicket of existing securities rules designed for older market structures.

The exemption is temporary, with a five-year expiration provision, and that time limit is one of its most important features. A five-year window gives venues room to build, test and operate, and gives the SEC room to observe how they behave in practice before deciding on a permanent approach. A temporary exemption is not the same as a permanent rule change, and businesses that treat it as one risk being caught unprepared when the clock runs out.

The SEC’s Innovation Exemption register, updated October 26, lists three notices of intent: TSV LLC, which filed on September 23, OKXICE TSV, which filed on October 4, and Kephas Corporation, doing business as Perpetuals.com, which filed on October 14. A notice of intent is a formal signal that a firm plans to rely on the exemption, and the register gives the market a public record of who is stepping forward. Three early names do not tell us how large this experiment will become, but they show that interest arrived quickly, within weeks of the exemption being announced.

The SEC’s March crypto-asset interpretation, effective March 23, is another existing regulatory action that belongs in the same picture. An interpretation is the agency explaining how existing law applies to a particular set of facts, and it can shape behaviour even without creating a new rule.

One caution deserves emphasis. A no-objection position should not be reported as blanket immunity for DeFi interfaces. Decentralised finance interfaces, the websites and applications through which users access decentralised protocols, operate in a legal grey area that different regulators view differently. A staff position that raises no objection to a particular arrangement, in particular circumstances, is not a guarantee that every similar arrangement is lawful, and it is certainly not a promise that enforcement will never follow.

The CFTC request for comment on crypto retail trading

While the SEC has moved on tokenized securities, the Commodity Futures Trading Commission has opened a different conversation, about retail trading in crypto commodities. The CFTC’s October advance notice of proposed rulemaking, published in the Federal Register on October 13, solicits comment on crypto retail commodity transactions under Section 2(c)(2)(D) of the Commodity Exchange Act, and comments are due December 14. An advance notice of proposed rulemaking is an early-stage step: the agency is asking the public, industry participants, consumer advocates and other interested parties to share views and evidence before it drafts a formal proposed rule.

The agency discusses concepts identified as Regulation CTX, covering crypto asset transactions, and Regulation CAM, covering crypto asset markets. The names matter less than the ideas behind them. Regulation CTX appears aimed at the transactions themselves, how retail customers buy and sell crypto commodities, what disclosures they receive, and what protections apply. Regulation CAM appears aimed at the markets where those transactions happen, how trading venues operate, how they handle custody, conflicts of interest and market integrity.

The December 14 deadline gives interested parties a window to explain how retail crypto trading actually works in practice, where consumers face risks, and where existing rules help or hinder. For the industry, the advance notice signals the direction of travel without yet fixing the destination.

The OCC GENIUS rule and payment stablecoins

The Office of the Comptroller of the Currency has moved further than either the SEC or the CFTC on one specific front: stablecoins. The OCC’s October 21 final GENIUS implementing rule addresses permitted payment stablecoin issuers, reserves, redemptions, custody, risk management, supervision, and applications, and it takes effect January 18, 2027. It implements the GENIUS Act, the stablecoin legislation Congress has already passed, and it sets out how the OCC will supervise the issuers that fall under its authority.

Each element of the rule addresses a concrete risk. Permitted issuers are the firms allowed to issue payment stablecoins under the framework. Reserves are the assets backing the stablecoins, and the rules about them determine whether a stablecoin can genuinely hold its peg. Redemptions are the process by which holders exchange stablecoins back for dollars, and reliable redemption is what makes a stablecoin useful as money rather than merely as a trading token.

The January 18, 2027 effective date gives issuers time to prepare, but it also creates a clear deadline.

Why the distinctions between rules, exemptions and proposals matter

The single most important point in this story is a distinction that is easy to miss in fast-moving news coverage. A rule in force, a conditional exemption, an agency staff position, and a request for comment are not interchangeable. Each carries different legal weight, different permanence, and different consequences for the people who rely on it.

A rule in force, such as the OCC’s GENIUS implementing rule once it takes effect, binds the parties it covers and can be enforced. A conditional exemption, such as the SEC’s Innovation Exemption, permits defined conduct under defined conditions for a defined period, and it can be withdrawn or allowed to expire. An agency staff position, such as an interpretation or a no-objection letter, explains how staff view the law, but it does not bind the Commission itself, a court, or another agency. A request for comment, such as the CFTC’s advance notice, asks questions and invites views, but it imposes no obligations at all until a rule follows.

For builders, the practical implication is to map each action to the specific activity it covers, and to ask what happens if it changes. A venue relying on the Innovation Exemption needs a plan for the five-year expiration, and an issuer preparing for the OCC rule needs to meet its requirements by January 18, 2027. For investors, the implication is to look past headlines that describe every agency action as a breakthrough or a crackdown, and to ask instead what kind of action it is, whom it covers, and how long it lasts.

FAQ

What is the CLARITY Act?

The CLARITY Act is a proposed market-structure law, H.R. 3633, designed to set out which regulators oversee different kinds of digital assets and what rules apply to them. On September 15, the Senate rejected cloture on the motion to proceed to the bill by a 49-50 vote.

What is the SEC Innovation Exemption?

The SEC’s September 17 Innovation Exemption offers conditional relief for qualifying tokenized-securities venues and certain proprietary liquidity providers. It is temporary, with a five-year expiration provision, and the SEC’s register, updated October 26, lists three notices of intent from TSV LLC, OKXICE TSV and Kephas Corporation, doing business as Perpetuals.com.

What is the CFTC asking about in its advance notice?

The CFTC’s October advance notice of proposed rulemaking, published in the Federal Register on October 13, solicits comment on crypto retail commodity transactions under Section 2(c)(2)(D) of the Commodity Exchange Act, with comments due December 14. It discusses concepts identified as Regulation CTX and Regulation CAM.

What does the OCC GENIUS rule do?

The OCC’s October 21 final GENIUS implementing rule addresses permitted payment stablecoin issuers, reserves, redemptions, custody, risk management, supervision, and applications. It takes effect January 18, 2027.

Why does it matter whether an action is a rule, an exemption or a request for comment?

A rule in force, a conditional exemption, an agency staff position, and a request for comment are not interchangeable. They carry different legal weight and different permanence.

Source: Independent Market Notes

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