Don't want to trade it yourself?
Our desk runs DEX portfolios on profit share.
Is the new crypto legislation truly dead in the water and what does it mean for the future of tokenized stocks?
The US digital assets industry should treat the Senate’s failure to advance the CLARITY Act as a signal to strengthen governance and compliance frameworks now, rather than wait for Congress to settle the regulatory landscape co-founder and CEO of financial platform WeFi.co
‘The biggest signal is that digital assets are increasingly being treated as part of financial infrastructure rather than as a separate technology sector,’ Sakharov tells Governance Intelligence.
His comments come after senators voted 49-50 on September 15 against advancing the Digital Asset Market Clarity Act, falling short of the 60 votes required to move the legislation forward. The vote was procedural rather than a final rejection of the bill, but it represents a significant setback for efforts to establish a comprehensive federal framework for digital assets.
The CLARITY Act was intended to establish clearer boundaries between the SEC and CFTC, including by giving the CFTC oversight of digital commodities such as bitcoin while leaving securities-related tokens under the SEC. It also included requirements around crypto exchanges, customer asset segregation and market surveillance.
For companies issuing digital assets, the legislation promised greater clarity over which regulator would have responsibility for different parts of the market. Its failure means that companies will continue to operate against a mixture of existing agency authority, developing rulemaking and legislation that remains unresolved.
‘These developments suggest that the regulatory framework is moving toward clearer rules about who is responsible for different parts of the digital asset ecosystem, even if the legislation itself is still being finalized,’ Sakharov says.
The vote followed months of negotiations between lawmakers, with disputes including the treatment of stablecoin rewards, banking concerns and ethics provisions relating to President Donald Trump and other federal officials with interests in digital assets. Republicans released a revised version of the bill immediately before the vote, saying it incorporated 126 substantive changes requested by Democrats, including new ethics provisions and a mechanism giving state attorneys general a role in enforcement. But these changes were not enough to secure the votes required to advance the legislation.
The result was felt immediately across crypto markets. The price of <a href="https://www.forbes.com/sites/antoniopequenoiv/2026/09/15/bitcoin-ethereum-and-other-major-cryptocurrencies-tumble-as-clarity-act-fails/” rel=”nofollow noopener” target=”_blank”>Bitcoin fell about 4.1 percent to around $75,000 on September 15, while Ethereum fell more than 5 percent. XRP dropped 10.3 percent, with Solana and Dogecoin also recording significant declines.
But the implications for governance extend beyond short-term market movements.
Sakharov says companies should increasingly view governance as part of the infrastructure supporting digital-asset products rather than something to be addressed once regulation is finalized.
‘For firms, the takeaway is recognizing that governance is becoming part of the product itself,’ he says. ‘Companies should expect greater scrutiny around accountability, operational controls, disclosures, and how decisions are made across the business.’
That means firms may need to prepare for regulatory expectations that continue to evolve across multiple agencies rather than building their frameworks around a single piece of legislation.
Phil Sham, CEO of Aquanow, a digital asset infrastructure and liquidity provider working with Visa and Emirates NBD Bank, says the Senate vote should also be viewed in the context of the broader integration of digital assets into financial markets.
‘While the Senate’s failure to advance the Digital Asset Market Clarity Act pauses a statutory framework, it underscores how central digital assets have become to core US financial policy,’ Sham says.
He adds that the legislative debate reached a standstill over questions including stablecoin integration with traditional banking deposits and the appropriate governance and oversight framework.
‘Legislative inaction does not equal regulatory stagnation,’ he continues. ‘The SEC and CFTC retain substantial existing authority to provide immediate, actionable clarity.’
For Sham, the immediate priority should be greater coordination between the agencies, including joint rulemaking, clearer registration requirements and allowing digital assets to be used as credit collateral.
‘Institutional participation requires three things: predictable asset classifications, workable compliance pathways, and harmonized cross-agency expectations,’ he explains. ‘In the interim, agency coordination can address these priorities while lawmakers work toward permanent legislation.’
Two days after the Senate vote, SEC chairman Paul Atkins announced the agency’s Innovation Exemption, a temporary framework intended to facilitate on chain trading of certain tokenized stocks. Atkins explicitly linked the move to Congress’s failure to advance the CLARITY Act, saying the SEC was acting within its existing statutory authority to bring US capital markets further into the digital age.
The exemption provides conditional relief for certain tokenized securities venues from the definition of an exchange and for certain liquidity providers from the definition of a dealer.
It also includes conditions around investor protection. Tokenized national market system stocks must provide holders with the same rights and privileges as traditional securities, including dividend and voting rights, while issuers must have an opportunity to object to their securities being traded on a tokenized venue.
Atkins described the exemption as a temporary step that should ultimately be followed by durable rulemaking, although his approach has already attracted criticism.
John Reed Stark, president of John Reed Stark Consulting and a former SEC enforcement official, argues that the agency is attempting to move into territory that Congress has been unable to legislate.
In LinkedIn comments following the announcement, Stark writes that ‘under a false flag of ‘fostering innovation,’ Atkins is attempting to usurp Congressional authority.
His criticism highlights the central governance question created by the Senate impasse: how much of the regulatory framework can and should be established by agencies when Congress has not enacted the broader statutory framework?
That question is particularly relevant to companies developing tokenized securities infrastructure. The SEC’s exemption may provide a route for experimentation in the near term, but agency action does not have the same durability as legislation. The exemption itself is temporary and the SEC has said it expects to use experience from the framework to inform future rulemaking.
But even with this latest blow, the CLARITY Act isn’t finished yet. According to The Block, JPMorgan analysts said the CLARITY Act is ‘not fully dead’ but the window for getting it passed this year is now ‘extremely narrow and only getting narrower’.
They noted that the bill remains on the Senate calendar and could be brought back for another vote before Congress adjourns. They also pointed to a precedent: the GENIUS Act, which is now law, failed its first cloture vote before ultimately advancing.
However, JPMorgan also cautions that agency rulemaking is less durable than legislation because agencies can amend or repeal rules under future administrations and agency actions can be challenged in court.
For issuers, that leaves an unsettled regulatory picture: congressional legislation remains possible, but the immediate direction of travel is increasingly being shaped by the SEC and CFTC.
Sakharov says firms should therefore avoid treating the current uncertainty as a reason to delay governance investment.
‘Waiting for every rule to be finalized is unlikely to be the strongest strategy,’ he says. ‘Companies that build clear accountability, resilient operating models, and transparent compliance processes into their products from the outset will be better positioned to earn the confidence of users, institutional partners, and regulators as the market continues to develop.’
Source: www.governance-intelligence.com