For nearly two years, the crypto industry’s Washington strategy was one word long: clarity. The idea was to get Congress to pass a market-structure law — actual legislation, signed by the president, dividing up jurisdiction between the SEC and the CFTC — and then everything else would follow. A law is the good kind of rule: hard to challenge in court, hard for the next administration to reverse, and a permanent barrier against whichever future regulator decides the industry is up to something.
Last week that strategy hit a wall. The Senate failed to advance the Clarity Act, the sweeping market-structure bill more than a year in the making, in a 49-50 procedural vote that fell well short of the 60 votes needed. Democrats voted against it, with three Republicans joining them, after months of negotiations foundered on ethics provisions tied to President Trump’s own crypto ventures — an awkward thing to trip over, given that the industry had been counting on this being the most crypto-friendly Congress it would ever get. Senator Cynthia Lummis, the bill’s lead architect, pronounced the effort all but dead for the year.
Here is the thing about a vacuum, though: something fills it. Within 48 hours of the bill’s collapse, the federal agencies that would have been instructed by the law instead started issuing the rules themselves.
The SEC went first and most visibly. Chairman Paul Atkins directly addressed the Clarity Act’s failure while introducing a new “innovation exemption” for digital assets — a framework letting qualifying venues trade tokenized U.S. stocks on-chain without registering as national securities exchanges. The signal was explicit: the agency intends to make crypto policy through its own authority rather than wait for lawmakers who had just demonstrated they couldn’t.
The CFTC, not to be left out, moved on parallel tracks. Its staff issued a no-action position letting passive software providers — crypto wallet apps, for instance — 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 that text isn’t public yet.
Then the Federal Reserve. On Thursday the central bank proposed rules requiring the stablecoin issuers it oversees to fully back their tokens with safe, liquid assets and to hold capital against operational risks. That’s the Fed’s piece of the multi-agency rollout of the GENIUS Act, the stablecoin law Trump signed in 2025 — a rollout that also includes the OCC, which is racing to finalize its own stablecoin rules by November, ahead of a January statutory deadline. Worth noticing that the stablecoin world already got its statute, and the result is... regulators writing rules. Legislation turns out to be the beginning of rulemaking, not the end of it.
The industry, largely, has made its peace with the detour. 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.” Which is a graceful way of accepting the consolation prize: rules of the road delivered by agencies, instead of the law that was supposed to bind those agencies forever.
The catch is built in. Agency rulemaking is slower to write, easier to challenge in court, and easier for a future administration to unwind than a statute. It wasn’t long ago that the SEC under Gary Gensler was running what the industry called a “regulation by enforcement” campaign that sent chills down every crypto executive’s spine. A market-structure law was supposed to make sure those days could never come back. What the industry has instead is a set of rules issued by a friendly SEC, CFTC and Fed that a less friendly SEC, CFTC and Fed could, in due course, simply issue different versions of. Everything that was built this week without Congress can be unbuilt without Congress.
Still, the industry was out of options, so it took what it could get: guidance from regulators who were, not that long ago, its villains. Whether those rules survive the next change of administration is now the whole question, and it is a question Congress was supposed to have answered.