The U.S. Securities and Exchange Commission (SEC) is prepared to move ahead with its own cryptocurrency regulatory framework if Congress fails to pass the Digital Asset Market Clarity (CLARITY) Act, according to SEC Chair Paul Atkins.
Speaking with CNBC, Atkins said the agency is “ready, willing, and able“ to issue rules covering many of the same issues addressed by the landmark crypto market structure bill should lawmakers fail to deliver legislation. While emphasizing that congressional action remains the preferred outcome, Atkins signaled that the SEC has already laid much of the groundwork for a regulatory fallback.
SEC prepares a regulatory backup plan
Atkins stressed that a law passed by Congress would provide the most durable solution for the digital asset industry because legislation is far less vulnerable to policy reversals than agency rulemaking.
“Statute is the way to future-proof something,” Atkins said, arguing that the crypto industry needs “the certainty of a statute” instead of a framework that could shift every time a new administration takes office.
Despite expressing confidence that Congress can still pass the CLARITY Act, Atkins confirmed the SEC is actively assisting lawmakers with technical guidance. He reiterated his support in a post on X, saying the Commission remains committed to helping Congress advance comprehensive crypto legislation.
His remarks underscore an increasingly realistic possibility that U.S. crypto regulation could initially emerge through SEC rulemaking rather than congressional legislation if political negotiations remain deadlocked.
SEC Ready to Provide Crypto Rules if Clarity Act Flounders: Chair Atkins (Source: X)
CLARITY Act faces mounting obstacles in the Senate
The CLARITY Act has made significant progress over the past year but remains stuck in the Senate.
The legislation passed the U.S. House of Representatives in July 2025 by a bipartisan 294-134 vote before advancing through the Senate Banking Committee in May 2026 with a 15-9 vote. However, the bill still requires approval from the full Senate, where supporters are expected to need 60 votes to overcome procedural hurdles.
Momentum has weakened in recent weeks as Senate Democrats raised concerns over the bill’s ethics provisions governing public officials’ involvement in crypto assets.
Although revised language reportedly backed by President Donald Trump would prohibit the president, vice president, members of Congress, senior federal officials, and their spouses from issuing or sponsoring digital assets for profit until January 20, 2029, critics argue the proposal still leaves important loopholes.
Opponents note that the restrictions do not require existing crypto holdings to be divested, nor do they extend to officials’ children. Meanwhile, another unresolved issue centers on whether stablecoin issuers should be permitted to offer yield to token holders, a debate that continues to divide lawmakers.
Last week, Senate Majority Leader John Thune indicated that the CLARITY Act is unlikely to receive a floor vote before Congress begins its August recess. The Senate has since prioritized other legislative business, including a Russia sanctions package, pushing crypto market structure legislation further down the agenda.
Why the CLARITY Act matters
The legislation would establish one of the most significant overhauls of U.S. crypto regulation to date by creating a clearer division of authority between the SEC and the Commodity Futures Trading Commission (CFTC).
Under the proposal, the CFTC would receive exclusive jurisdiction over spot markets for digital commodities, moving many cryptocurrencies outside the SEC’s direct oversight while allowing the securities regulator to continue supervising tokenized securities and investment contracts.
Supporters argue that the framework would replace years of regulatory uncertainty with a consistent set of rules defining which agency oversees different categories of digital assets, reducing compliance risks for exchanges, issuers, brokers, and institutional investors.
Project Crypto becomes the SEC’s fallback
Even if Congress delays the CLARITY Act, the SEC has already begun implementing many of its core ideas through Project Crypto, Chairman Atkins’ broader regulatory initiative.
The agency’s Regulation Crypto agenda for 2026 includes proposals covering:
Registration exemptions for certain token offerings;A safe harbor framework for decentralized blockchain projects;Rules governing broker-dealer custody of digital assets;Regulatory standards for crypto trading venues; andAdditional guidance for tokenized securities and blockchain-based financial products.
Earlier this year, the SEC and CFTC also jointly introduced a new framework categorizing crypto assets into multiple groups, including digital commodities, digital collectibles, digital tools, payment stablecoins, and digital securities.
The guidance clarifies that a digital asset is not automatically a security simply because it exists on a blockchain. Instead, whether securities laws apply depends on how the asset is offered and sold, particularly if investors rely on promises of managerial efforts under the Howey investment contract test. Once those obligations have been fulfilled, a token may no longer fall under securities regulation.
Rulemaking cannot replace legislation
Despite the SEC’s readiness to proceed independently, Atkins has repeatedly acknowledged that agency rules have important limitations.
Unlike legislation enacted by Congress, SEC regulations and joint agency guidance can be revised or withdrawn by future administrations without requiring another vote from lawmakers. That means regulatory certainty achieved through rulemaking may prove temporary if political priorities change after future elections.
For that reason, Atkins continues to describe the SEC’s regulatory agenda as a bridge toward comprehensive market structure legislation rather than a permanent substitute.
Whether Congress ultimately revives the CLARITY Act after the August recess or the SEC moves ahead with its own rulemaking, the coming months are likely to determine the direction of U.S. digital asset regulation. The outcome will shape not only which federal agencies oversee the crypto industry but also how issuers, exchanges, developers, and institutional investors operate in the world’s largest financial market.
