A month after the CLARITY Act stalled in the US Senate, Washington’s crypto rules are being written by regulators rather than by Congress. Between August and October 2026, the Securities and Exchange Commission (SEC) proposed a token offering regime and a custody framework, and the Commodity Futures Trading Commission (CFTC) opened work on retail crypto trading, published in the Federal Register on 13 October. This analysis looks at what each agency is doing, why the legislative route is blocked for now and what it means for investors in the US and Europe.
Why the CLARITY Act stalled
The Digital Asset Market Clarity Act (H.R. 3633) was meant to give crypto a full market structure: the CFTC would oversee “digital commodities” and their spot markets, the SEC would oversee digital securities. The House passed it on 17 July 2025 by 294 votes to 134, according to law firm Orrick. The Senate Banking Committee advanced its own version on 14 May 2026.
On 15 September 2026, the Senate failed to invoke cloture on the motion to proceed, the procedural step needed before debate, by 49 votes to 50, short of the 60 required. Orrick points to two sticking points: ethics provisions on federal officials’ crypto holdings, and stablecoin yield, with banks concerned that yield-bearing stablecoins could draw deposits away from them. Senator Thom Tillis voted no so that he could file a motion to reconsider, which keeps a path open to bring the bill back.
The calendar is tight. According to Baker Botts, the Senate is not scheduled to resume legislative business until 9 November, after the 3 November midterm elections. If the bill does not pass before this Congress ends, it would have to be reintroduced in the new Congress that convenes in January 2027.
The SEC: offerings, custody and tokenised trading
The SEC has moved on several fronts at once.
- Regulation Crypto Assets. Proposed in August 2026 and published in the Federal Register on 21 August, this would create a “startup exemption” for offerings of up to $5 million over four years and a “fundraising exemption” of up to $75 million in a 12-month period, with crypto-specific disclosures, a safe harbor for when a token stops being part of an investment contract, and preemption of certain state registration rules. Comments close on 20 October 2026, according to Mondaq.
- Custody. On 1 October the SEC proposed rules allowing state trust companies to act as crypto custodians for advisers and funds, and adviser self-custody as a last resort.
- Tokenised securities. Baker Botts reports that the SEC granted temporary, conditional relief to tokenised securities venues trading tokenised stocks, effective for five years through 17 September 2031.
These steps build on a joint SEC and CFTC interpretation of 17 March 2026 that sorted crypto assets into five groups: digital commodities, digital collectibles, digital tools, stablecoins and digital securities, Orrick notes.
The CFTC: a federal option for retail crypto trading
The CFTC’s contribution is the advance notice of proposed rulemaking of 5 October. It floats a new “crypto asset market” category of regulated exchange and futures-style protections for retail crypto transactions offered with leverage, margin or financing. Comments are due by 14 December 2026. Unlike the CLARITY Act, the framework would not force crypto assets to trade only on CFTC-registered platforms.
An advance notice is only a first step. Orrick estimates that binding CFTC rules may be more than a year away.
Rules versus law: the limits of the regulatory route
Rulemaking can fill gaps quickly, but it has limits that matter for the market.
- Durability. Agency rules can be revised by future commissions, while a statute can only be changed by Congress. Firms planning long-term investments in the US tend to prefer the stability of law.
- Jurisdiction. Agencies can only act within the powers Congress gave them. The CFTC, for example, relies on its authority over leveraged retail transactions; it cannot create a full spot-market regime for unleveraged trading on its own.
- Patchwork. Without federal legislation, state licensing and enforcement regimes continue to govern much of the activity, Orrick notes.
- Timing. Every proposal must go through comment periods and final votes, which pushes most binding rules into 2027.
How it compares with Europe
European readers live under a different model. The EU chose a single regulation, MiCA, whose transitional period for crypto-asset service providers ended on 1 July 2026. Licensing, stablecoin rules and conduct requirements all sit in one text, which national authorities and ESMA apply; the open questions concern how to supervise and update it, not whether it exists. Our MiCA guide explains the framework.
The US approach is more fragmented but moving fast: one law on stablecoins, the GENIUS Act of July 2025, plus a growing set of agency rules and exemptions. For global platforms, that means two very different compliance paths.
What it means for investors
For now, nothing changes overnight for people who buy crypto in the US. Proposals are not yet binding, and existing rules still apply. Over time, these rulemakings could bring more regulated venues, clearer disclosures for new tokens and more regulated custody options. They do not remove market risk, and the projects that use the new exemptions will still need careful scrutiny: our guide on how to avoid crypto scams lists the warning signs. This article is information, not legal or investment advice.
Key dates to watch
- 20 October 2026: end of the comment period on the SEC’s Regulation Crypto Assets.
- 3 November 2026: US midterm elections, which will shape the next Congress.
- 9 November 2026: scheduled return of the Senate to legislative business.
- 14 December 2026: deadline for comments on the CFTC’s retail crypto notice.
- Federal Register publication of the SEC custody proposal, which starts its 60-day comment period.