How Crypto Learned to Embrace Regulators Instead of Waiting for Congress

Last week, the Senate failed to advance the Clarity Act in a 49-50 procedural vote, shifting crypto rulemaking from Congress to federal regulators, likely for the foreseeable future. The sweeping market-structure bill had been more than a year in the making and needed 60 votes. Democrats voted against it, with three Republicans joining them, after months of negotiations foundered on ethics provisions tied to President Donald Trump's crypto ventures. Lead architect Senator Cynthia Lummis called the effort all but dead for the year.

The change matters because the rules now written by agencies will determine how exchanges, wallet apps, and stablecoin issuers can operate.

A strategy centered on clarity

For nearly two years, the crypto industry's Washington strategy rested on a single word: clarity. The plan was to pass a market-structure law, then let the rest follow. The Clarity Act was the central piece, and Myriad had posed a prediction prompt asking whether Congress would pass it. The bill's collapse ended that route, but it did not stop rulemaking; it redirected it.

Regulators moved within 48 hours

Within 48 hours, federal agencies moved to fill the vacuum. The Securities and Exchange Commission went first and most visibly. Chairman Paul Atkins introduced a tokenized-stock "innovation exemption" for digital assets while directly addressing the Clarity Act's failure. The framework lets qualifying venues trade tokenized United States stocks on-chain without registering as national securities exchanges. It was the clearest signal yet that the agency intends to set crypto policy through its own authority rather than wait for lawmakers.

For venues, the exemption creates a pathway for tokenized stock trading formats that would otherwise face exchange registration requirements. For users, it means the next phase of market development will be shaped by regulatory guidance rather than by a new statutory framework.

The Commodity Futures Trading Commission also issued no-action relief. Its staff adopted a no-action position letting passive software providers, including crypto wallet apps, give users access to regulated derivatives without registering as introducing brokers. The agency also sent a broader crypto-markets rulemaking to the White House for review, though the text is not yet public.

The relief is significant for wallet providers because it clarifies that simply offering access to regulated derivatives may not trigger broker registration.

Then the Federal Reserve moved. On Thursday, the central bank proposed stablecoin reserve and capital rules requiring the issuers it oversees to fully back their tokens with safe, liquid assets and hold capital against operational risks. That proposal is part of the multi-agency rollout of the GENIUS Act, the stablecoin law President Donald Trump signed in 2025. The rollout also includes the Office of the Comptroller of the Currency, which has been racing to finalize its own stablecoin rules by November ahead of a January statutory deadline.

Why industry figures accept the pivot

Industry figures have largely made peace with a regulatory landscape being built rule by rule rather than by a single act of Congress. Solana Policy Institute President Kristin Smith said the sector is "now looking to regulators for guidance," calling it "the more viable path forward right now."

The catch is that agency rulemaking is slower to write, easier to challenge in court, and easier for a future administration to unwind than a law. It was not long ago that the Securities and Exchange Commission, then chaired by Gary Gensler, ran a "regulation by enforcement" campaign during the Joe Biden administration that unsettled crypto executives. A market-structure law was meant to prevent those days from returning.

What comes next

For now, the industry must take what it can get. It is receiving rules of the road from previously hostile regulators instead of from arguably the most industry-friendly Congress yet. For readers, the practical test is not only whether rules are issued, but whether they survive litigation and a change in administration. Whether those agency rules hold is the story of the months and potentially years ahead. The original brief was carried in the Daily Debrief Newsletter.