US Regulators Step In to Set Crypto Policy Amid Clarity Act Impasse

As federal digital asset legislation stalls in the United States Congress, regulatory bodies like the Securities and Exchange Commission and the Commodity Futures Trading Commission are stepping in to set their own policies, according to reporting by Reuters on Tuesday, Aug. 18. This regulatory shift has triggered sharp concerns across the financial and digital asset sectors that these administrative rules remain vulnerable to future political reversals.

The Legislative Impasse Driving Regulatory Action

Cryptocurrency companies have spent hundreds of millions of dollars lobbying for comprehensive legislation to establish a stable legal status. However, time is running out for lawmakers to reach an agreement before the new Congress convenes in 2027. According to Reuters, this legislative paralysis leaves federal regulators to fill the void. The Securities and Exchange Commission is currently working on a rule that would exempt certain token offerings from traditional securities regulations, while the Commodity Futures Trading Commission is scheduled to discuss crypto regulation at an upcoming industry gathering.

The agencies … seemingly are ready to act, given that Congress has been unwilling or unable to do so, Miller Whitehouse-Levine, CEO of the Solana Policy Institute, told Reuters.

Vulnerability to Political Shifts and the Clarity Act Debate

At the center of the legislative debate is the Clarity Act, which would formally define which tokens qualify as securities versus commodities and clarify agency jurisdictions. The Senate has scheduled a procedural vote on the Clarity Act for Sept. 15, which could signal whether the legislation has a viable future. The bill faces an uphill battle due to a shortened schedule driven by the November midterms and opposition from Democrats calling for ethics provisions regarding President Donald Trump’s involvement in the crypto sector.

Without the Clarity Act, crypto executives and analysts warn that new regulatory policies will remain vulnerable to legal challenges and shifting political climates. President Donald Trump’s administration illustrates this risk; when Trump took office in 2025, the White House rolled back several policies introduced under former Democratic President Joe Biden. Industry leaders worry that a future administration could revert to aggressive enforcement actions reminiscent of former SEC Chair Gary Gensler, who launched legal proceedings against multiple digital asset firms under the Biden administration.

The next administration, depending on how that shakes out, we can be looking very much like a potentially Gensler 2.0 type scenario, Josh Riezman, chief legal and strategy officer at cryptocurrency trading firm GSR, told Reuters, noting that short-term SEC and CFTC policies are helpful but ultimately fragile without statutory backing.

Impact on Traditional Banking and Balance Sheets

The political impasse also affects traditional financial institutions, according to analysis from The Banker. Banks continue to avoid holding most cryptocurrencies on their balance sheets as the Clarity Act falters in the US Senate. By recognizing banks’ right to hold crypto assets and dividing responsibilities between the SEC and the CFTC, the proposed legislation would provide lenders with the legal certainty they require to build out commercial crypto businesses, The Banker reported.