US Regulators Advance Crypto Agenda Amidst Congressional Stalemate
New actions from the two largest regulatory bodies in the United States indicate that the domestic cryptocurrency industry continues to make progress on the regulatory front, even in the absence of legislative action from Congress.
The Commodity Futures Trading Commission’s (CFTC) move coincided with a broader market price resurgence on Friday, prompting questions about whether the rally in Bitcoin and other cryptocurrencies was driven by these regulatory developments.
On September 17, the Securities and Exchange Commission (SEC) introduced a five-year “Innovation Exception” program designed to streamline the process for qualifying platforms to trade tokenized U.S. stocks on-chain. This initiative offers eligible trading venues relief from certain exchange requirements and provides liquidity providers with temporary exemptions from dealer-registration rules.
While tokenized stocks must still afford the same fundamental shareholder rights as traditional equities, including dividends and voting rights, synthetic products that merely track share prices will be excluded. The SEC argued that this framework could facilitate 24/7 trading, accelerate settlement times, enhance transparency, and enable self-custody, thereby lowering barriers for blockchain-based securities platforms.
The timing of this announcement is particularly noteworthy, coming shortly after the setback of the CLARITY Act. It may carry a more significant message than simply regulating tokenized stocks. SEC Chair Paul Atkins had previously stated that the agency would pursue its cryptocurrency agenda regardless of whether Congress passed the CLARITY Act.
The commodity watchdog has taken a similar step by submitting “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets” to the White House Office of Information and Regulatory Affairs for review. This submission marks the next phase toward establishing a formal crypto market framework under the CFTC’s existing authority.
The CFTC also issued a no-action position that shields certain software developers from being classified as introducing brokers, provided specific conditions are met. CFTC Chair Michael Seling had indicated, even before the CLARITY vote, that his agency would leverage its existing powers to begin constructing a crypto market-structure regime, even if legislative efforts stalled.
It is important to note that neither the SEC’s nor the CFTC’s proposals are a substitute for the CLARITY Act. Rules established by regulators are inherently less durable than legislation passed by Congress, as they can be more easily altered by a future administration. Nevertheless, these developments may have provided reassurance to markets that the regulatory process has not been entirely reset.
This may explain Bitcoin’s price rally on Friday, which surged from approximately $78,000 to a two-week high of over $81,000 following the CFTC’s announcement.
