Congress was supposed to settle one of crypto's biggest questions this year: which federal agency oversees which tokens. Instead, the Digital Asset Market Clarity Act, better known as the CLARITY Act, stalled in the Senate in September. With lawmakers focused on the Nov. 3 midterms, the job of writing U.S. crypto rules has shifted to regulators, and the first public comment deadline arrives on Oct. 20, 2026. Here is how the CLARITY Act stalled, what the SEC and CFTC are doing instead, and why it matters for anyone who uses a U.S. crypto platform. How the CLARITY Act Stalled The House passed the bill, H.R. 3633, on July 17, 2025, by a vote of 294-134, with 78 Democrats voting yes, according to a GOV.HOUSE review of the record. The Senate Banking Committee advanced a substitute version 15-9 on May 14, 2026. The floor vote went differently. On Sept. 15, 2026, a cloture motion to proceed to the bill failed 49-50, eleven votes short of the 60 needed. As TokenPost noted, that procedural vote decided whether the Senate could take up the measure, not whether to pass it. Per GOV.HOUSE, negotiations broke down over ethics language. Democrats wanted an enforceable bar on the president, senior officials and their families profiting from crypto; Republicans would not agree to the version Democrats sought. With the 119th Congress ending in January, a market-structure bill would likely have to start over in the next Congress. What the SEC Is Proposing SEC Chair Paul Atkins has said durable crypto rules ultimately need Congress, but the agency is moving on narrower issues under its existing authority. Its main proposal, called Regulation Crypto Assets, was unveiled on Aug. 18. According to TokenPost and GOV.HOUSE, it would create two exemptions from Securities Act registration for certain offerings tied to crypto assets: - One track would allow offerings of up to $5 million over four years. - The other would allow up to $75 million in any 12-month period, with financial statements and ongoing reporting. The proposal also includes a conditional safe harbor under which a qualifying crypto asset would be treated as not subject to an investment contract. Public comments are due Oct. 20, 2026. The SEC has also proposed crypto custody rules for advisers and funds, with comments due Dec. 7. One complication: GOV.HOUSE reports the SEC has been down to two commissioners, Atkins and Mark Uyeda, since Commissioner Hester Peirce, who led the agency's crypto task force, departed on Oct. 2. What the CFTC Is Planning The Commodity Futures Trading Commission is also stepping in. In an interview recapped by Yahoo Finance on Oct. 19, CFTC Chairman Mike Selig described two initiatives: - Regulation Crypto Asset Transactions (CTX) would allow retail investors to trade spot crypto with margin, leverage and financing on federally regulated U.S. platforms. - Regulation Crypto Asset Markets (CAM) would create a federal registration pathway for exchanges offering those transactions, so they could operate nationwide under CFTC oversight rather than relying only on state-by-state licenses. Both are early in the process. GOV.HOUSE notes that the CFTC's Oct. 13 notice is an advance notice of proposed rulemaking, with comments due Dec. 14, which means at least one more proposal and comment round before anything is binding. A law firm analysis cited by GOV.HOUSE put a binding CFTC rule no earlier than late 2027. Selig also addressed concerns about combining brokerage, exchange and clearing under one roof, the kind of conflict that contributed to the FTX collapse. He said the framework would require safeguards to separate those functions and protect customer funds. What Rulemaking Cannot Do Agency rules have limits. As GOV.HOUSE summarizes, the CFTC lacks clear statutory power to license spot crypto exchanges, brokers and dealers; bankruptcy protections for customers' digital commodities would require a change to the Bankruptcy Code; and rules written by one commission can be revised by a later one. That is why industry groups and regulators alike keep pointing back to Congress. Why It Matters for U.S. Crypto Users For everyday users, the practical effect is uncertainty that lasts longer. Exchanges continue to operate under a patchwork of state licenses and existing federal rules. New products, such as regulated margin trading on U.S. platforms, could eventually arrive through CFTC rules, but not quickly. Interestingly, Schwab's head of crypto research told CoinDesk that the midterm results may matter less for crypto prices than investors expect, given bipartisan support for crypto legislation. Key dates to watch include Oct. 20 (SEC comment deadline), Nov. 3 (midterm elections), Dec. 7 and Dec. 14 (SEC custody and CFTC comment deadlines), and January 2027, when a new Congress convenes. This article is for information only and is not financial or investment advice. Key takeaways - The CLARITY Act's Senate cloture vote failed 49-50 on Sept. 15, 2026, after the House passed the bill in July 2025. - The SEC's Regulation Crypto Assets proposal would create $5 million and $75 million offering exemptions plus a safe harbor; comments close Oct. 20. - The CFTC is developing CTX (retail margin and leverage) and CAM (federal exchange registration) rules, still at an early stage. - Agency rules cannot replace legislation on issues such as spot-market licensing and bankruptcy protections. - Watch the Nov. 3 midterms and the new Congress in January 2027. Sources - GOV.HOUSE: CLARITY stalled at 49-50. Crypto's rulebook now runs through agencies (https://gov.house/regulation/clarity-act-fails-sec-cftc-crypto-rules/) - TokenPost: Atkins ties durable crypto rules to Congress as SEC comment deadline nears (https://www.tokenpost.com/news/regulation/34307) - Yahoo Finance: The CFTC's proposed rules to reshape U.S. crypto markets (https://finance.yahoo.com/markets/crypto/articles/cftcs-proposed-rules-reshape-u-173657884.html) - CoinDesk: Live updates, Oct. 19, 2026 (Schwab on midterms) (https://www.coindesk.com/markets/2026/10/19/live-updates-bitcoin-tags-usd83-000-and-slips-back-as-chip-stocks-lead-a-rebound)
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