#SECProposesNewCryptoRulesintheAbsenceoftheCLARITYAct

SEC Proposes New Crypto Rules in the Absence of the CLARITY Act

After lawmakers in the U.S. Congress failed to pass a market structure bill before heading into a month-long recess, the U.S. Securities and Exchange Commission (SEC) proposed new rules that could impact the cryptocurrency sector.

In a statement released on Tuesday, the SEC announced it was proposing rules aimed at establishing a "clear and fit-for-purpose framework for certain investment contracts involving crypto assets." According to the regulator, this "tailored securities offering regime" would allow entities to raise capital while maintaining investor protections.

The rules proposed by the agency did not include an "innovation exemption" for crypto-based securities, contrary to earlier expectations. It is noteworthy that the proposed rules arrived just days after the U.S. Senate failed to advance the Digital Asset Market Clarity (CLARITY) Act. That bill was expected to clarify the roles of federal agencies regarding the oversight and regulation of cryptocurrencies.

"Legislation is essential to create durable and 'future-proof' rules that will prevent the work we do today from being undone by a future regulator who disregards the rules," said SEC Chair Paul Atkins. "The SEC will continue to support Congress as the CLARITY Act moves toward President Trump's desk."

Under the proposed rules, crypto companies would be granted "safe harbor" status, preventing cryptocurrencies from being classified as "investment contracts"; In addition, exemptions will be granted allowing them to issue tokens worth up to $5 million over a four-year period and up to $75 million over a 12-month period. Token-issuing entities will be required to submit financial statements and will be subject to "ongoing reporting obligations."

Once the proposal is published in the Federal Register, there will be a 60-day public comment period.

The SEC’s proposed rules—issued in the absence of legislation from Congress—precede a meeting scheduled for Thursday by the U.S. Commodity Futures Trading Commission (CFTC) regarding crypto, artificial intelligence, and prediction markets. The commodities regulator stated that it plans to address areas where "regulatory steps could complement future congressional legislation."

Atkins was scheduled to speak at the symposium on Tuesday but canceled his appearance around the time of the SEC’s announcement. Patrick Witt, a White House crypto advisor, stated at the event that U.S. regulators would "take the reins" on crypto regulation if Congress failed to advance the CLARITY Act.

What are the chances for CLARITY before the new Congress is sworn in?

Before the Senate recessed for the August state work period, Majority Leader John Thune filed a cloture motion to advance the CLARITY crypto bill when lawmakers return in mid-September.

Following the August recess, senators have only 14 days of session scheduled before breaking again ahead of the November elections. If Thune and Republican lawmakers cannot secure a floor vote by then, the Senate has only 22 additional days of session remaining before 2027, when the new members of Congress are sworn in.