- Senate blocks CLARITY Act, leaving crypto firms with uncertain and temporary regulation.
- SEC relief gives tokenized stock venues a five-year pathway with trading limits.
- CFTC Letter 26-25 eases software access but retains joint liability conditions.
The Senate’s failure to advance the CLARITY Act has left crypto companies facing a key problem: regulatory permission without permanence. Senators rejected cloture on H.R. 3633 by 49-50 on September 15, preventing the chamber from moving forward with the bill.
However, Sen. Thom Tillis entered a motion to reconsider, which left the measure procedurally stalled rather than formally dead. As a result, attention has shifted toward the SEC and CFTC, which have opened alternative pathways for tokenized stocks and derivatives.
Although companies can use those routes, both still depend on agency relief rather than legislation. Consequently, firms now have regulatory pathways to build on, but those permissions remain less durable than rules established by Congress.
SEC Tokenized Stock Relief Carries a Five-Year Expiry
On September 17, the SEC issued its Innovation Exemption for Tokenized Securities Venues. SEC Chair Paul Atkins linked the move to Congress’s failure to advance the CLARITY Act. The order gives qualifying venues five years of conditional relief from the Exchange Act’s definition of an exchange.
It permits tokenized National Market System stocks to trade through permissioned automated market makers and liquidity pools. However, the framework caps trading volumes and supported securities. Tokenized shares must also provide the same rights as equivalent traditional shares.
For third-party tokenization, venues must notify the underlying issuer and provide an opportunity to object. Therefore, regulatory eligibility does not guarantee every qualifying stock will trade on-chain.
That leaves issuer objections as a second access barrier after regulatory eligibility. The SEC described the exemption as temporary while it considers additional action, leaving permanent rules unresolved.
CFTC Software Relief Expands Access With Shared Liability
A similar durability issue appears in the CFTC’s approach. On September 17, the agency issued Staff Letter 26-25, extending no-action relief to passive software providers. Under specified conditions, providers can facilitate trading through registered firms and designated contract markets without registering as introducing brokers.
However, users must open accounts directly with regulated firms and retain independent access. In addition, providers and registrants must accept joint and several liability for covered violations.
That structure removes one registration requirement while keeping regulated firms and compliance central. The relief also remains limited in scope. The letter reflects division views and does not bind the Commission. The division, however, can modify, suspend, terminate, or further restrict the position.
Meanwhile, a broader CFTC initiative entered White House review on September 17 at the prerule stage, although its substantive details remain unpublished. Taken together, these measures show that crypto companies can build under agency relief. However, those pathways remain conditional and dependent on future regulatory action.
Related: CFTC Sends Crypto Rules to White House After CLARITY Act Setback
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