Crypto Industry Points to SEC and CFTC After CLARITY Setback

Trade groups and executives responded to the Senate blocking the CLARITY Act by pointing at agency rulemaking, saying the SEC and the CFTC can keep writing crypto rules without the bill. Several framed the loss as one of permanence, since a future agency chair can rewrite a rule and repealing a statute takes another act of Congress. Mark Warner, one of the seven Democrats who negotiated the bill, said the president’s ability to profit from crypto was what made it impossible for him to vote yes.
By:The Defiant Team•
Regulation & Politics

The crypto industry responded to the Senate blocking its market structure bill by arguing that the rules are coming anyway, and that the SEC and the CFTC will write them.

The argument running through the statements issued since Tuesday’s vote is that the agencies keep writing crypto rules either way, and what the Senate withheld is the version a future chair cannot undo. Repealing a statute takes another act of Congress. Rewriting an agency rule takes a new commissioner.

The Senate rejected cloture on the motion to proceed to H.R. 3633 by 49-50 on Tuesday afternoon, 11 votes short of the 60 required. Susan Collins, Josh Hawley, Jerry Moran and Thom Tillis were the four Republicans voting no. No Democrat or independent voted to proceed, and Chris Coons did not vote. The Defiant reported the result Tuesday.

“This is not the end of our work to provide long-overdue consumer protection provisions and regulatory clarity for America’s digital asset users and entrepreneurs,” Blockchain Association CEO Summer Mersinger said in a statement. The group will “work tirelessly to support and share expertise with the SEC and CFTC as they move forward with important regulatory guidance,” she said.

Crypto Council for Innovation CEO Ji Hun Kim called the vote “disappointing” and said CCI “will continue working with regulatory agencies, including the SEC, CFTC, OCC, and others to ensure that there are clear rules, innovators can build domestically, and consumers are protected.”

The Durability Argument

Executives across trading firms and protocols made the same point: agency rules are reversible, and statutes are not.

“Durability is where the vote still matters,” said Connor Howe, co-founder and CEO of Enso. “The next chair can rewrite an agency rule without a single vote in the Senate. Repealing a statute takes another act of Congress, a bar few chairs manage to clear. Banks and asset managers on the fence hold out for the version that outlasts whoever runs the agency next.”

Andreja Cobeljic, head of derivatives trading at AMINA Bank, said the bill “was always about longevity — giving crypto market structure a legislative foundation that survives changes in administration. That foundation is now missing. What remains is the regulatory direction itself, and that is still moving forward.”

Abhishek Vaidyanathan, chief legal officer at NEAR, said the outcome “leaves firms completely dependent on agency guidance and ongoing administrative discretion,” with a token’s treatment continuing to depend on “agency discretion and historical promises rather than fixed statutory law.” Firms setting 2027 budgets face “another prolonged delay, forcing them back into case-by-case judgments and repeated legal work,” he said.

Orest Gavryliak, chief legal officer at 1inch, said the US is left with “rescindable agency guidance, regulation by enforcement, and a patchwork of state rules,” and that “what the industry still lacks is a durable safe harbor written into law.”

Samson Leo, co-founder and chief legal officer of Singapore’s StraitsX, said agency rulemaking “can continue to provide guidance, but legislation can offer a more durable foundation for institutions making long-term decisions.”

Mohammad Akhavannik, managing director of the Newton Foundation, pointed at a different set of agencies. “Regulators didn’t need this bill to act on compliance; Treasury and FinCEN already have that authority, and they’ve used it before,” he said. “Waiting for legislation is how DeFi ends up reacting to rules instead of helping shape them.”

Traders Were Never Positioned

Trading desks attributed the limited price reaction to positioning ahead of the vote.

“There was little evidence that traders had positioned themselves for its passage,” said Jag Kooner of Bitfinex. “With few market participants betting on the bill’s approval, there were correspondingly few positions to unwind after it failed.”

Barnali Biswal, CEO of Hilbert Group, said falling short of 60 votes “shouldn’t trigger a steep sell-off” because “prediction markets had already priced in failure.” Paul Howard, senior director at Wincent, said the result “was no surprise for many,” citing Polymarket odds of about 20%. Andrew Yang, research analyst at Kaiko, put the odds “around 27 to 28%” heading into Tuesday, falling “to the low teens as the vote neared.” The Defiant reported the market at 19.5% on Tuesday morning.

XRP Falls Nine Times Bitcoin

Bitcoin traded at $75,667 on Wednesday, down 1.0% over 24 hours, CoinGecko data shows. Coinbase recorded a 24-hour low of $74,887.50.

XRP fell 9.5% to $1.27 over the same period. Ether was at $2,392, down 2.1%, Solana at $97.02, down 3.0%, and BNB at $710.72, down 1.1%.

Polymarket priced the CLARITY Act being signed into law in 2026 at 5.3% on Wednesday, down 8.8 points over 24 hours, on $20.9 million of cumulative volume.

The Federal Open Market Committee releases its decision Wednesday afternoon.

Stablecoin Yield Survives The Vote

The fight over whether platforms can pay users on stablecoin balances outlived the bill.

“Major bank trade groups were lobbying against the stablecoin yield language right up to the vote, and that fight doesn’t go away just because cloture failed,” Biswal said. Adam Morgan McCarthy, lead researcher at LO:TECH, called stablecoin rewards “the fight that actually matters here,” and said the question “doesn’t disappear because this vote failed.”

Howard put both disputes side by side. “Some US Democrats wanted tougher ethics rules on the first family, and some Republicans sided with community banks on stablecoin yield, so no SEC/CFTC statute will come this cycle,” he said.

Bitfire Research listed the remaining disagreements as “federal and state enforcement powers, stablecoin yields, banking safeguards and protections for software developers,” and said the debate “has moved beyond whether crypto should be regulated.”

Republicans released the final text Monday with an ethics division they said reflected “substantially all” of the Tillis-Gallego proposal.

Warner Points At Trump

Warner, one of the seven Senate Democrats who spent a year negotiating the bill, put the president’s crypto holdings at the center of his no vote.

“We cannot pass landmark legislation governing this industry while allowing the President of the United States to personally profit from it,” he said. “The president should not be able to use the power and influence of his office to benefit his own crypto holdings while his administration makes decisions that could directly affect their value.”

Warner said negotiators “got close to resolving some of the toughest outstanding issues around law enforcement and national security, but ultimately, the failure to address this fundamental conflict of interest made it impossible for me to support moving forward.”

Chamber of Progress, a center-left tech coalition, had written to Chuck Schumer before the vote urging Senate Democrats to back cloture. “There’s no sugarcoating it. This was a really disappointing result after years of negotiation,” said Max Raymond, its director of financial policy, in a statement. “Consumers and businesses are now stuck with the status quo of no clear crypto rules, which everyone agrees is unacceptable.”

Europe And Asia Move On

Executives outside the US framed the delay as a competitive question.

“A failed vote in Washington does not slow Asia down,” said Vincent Chok, founder and CEO of First Digital, issuer of FDUSD. “Hong Kong’s Stablecoins Ordinance and Singapore’s stablecoin frameworks were built independently of the US.” A longer delay “risks widening the gap between the jurisdictions that have finished and those still debating,” he said.

Gavryliak said Europe “already has MiCA in force, at least for the centralized half of the market.” Vaidyanathan noted MiCA has been operating since December 2024. Leo said Singapore’s recent consultation is “already looking beyond domestic regulation towards questions such as foreign-regulated stablecoins and multi-jurisdictional issuance.”

Bitfire Research, the research arm of Hong Kong-listed Bitfire Group, said the delay gives Hong Kong “a critical strategic window,” while cautioning that “the advantage may be temporary.”

Mersinger’s statement listed Europe, the United Kingdom, Singapore, the UAE and Japan as jurisdictions with frameworks in place. “This technology is being built in America, and America should guide its future,” she said.

Two Days To Reconsider

Tillis voted no in order to move to reconsider, and entered the motion a minute after the result was announced. A senator on the prevailing side can make that motion, which keeps a second cloture vote available without a new filing.

Kim said the step “allows another cloture vote within two days.” Mersinger said it “preserves a path for the Senate to revisit the vote.” Gavryliak said “today’s result is a delay, not a verdict,” and that “a cloture vote can be brought again.”

Michael Ho, co-founder of D3, said that if the bill does not move now, “a new Congress will have to start over on what took years to draft, while the assets the bill was meant to govern keep moving towards markets that have already set their rules.”

The Senate’s 2026 legislative calendar sets a state work period from Oct. 5 to Nov. 6, and a further non-legislative period Nov. 11-13.

RegulationSECCFTC

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Source: thedefiant.io