U.S. regulators rush to write crypto rulebook after Clarity Act stalls in Senate

State and federal regulators are rushing to fill the void in U.S. cryptocurrency regulation after the Clarity Act, a comprehensive set of proposed rules for digital assets, stalled in the Senate. Just two days after the Clarity Act failed to advance in the Senate, the Securities and Exchange Commission expanded its crypto rulebook under its existing authority. The agency issued an order creating a temporary pathway for trading certain tokenized stocks, inching financial markets closer to 24/7 trading. The same day, the Commodity Futures Trading Commission submitted a crypto rulemaking proposal to the White House for review. The details of the proposal weren't made public, but a post by the Office of Management and Budget confirmed the rules were pending review. The crypto industry, which had supported the Clarity Act, says it is eager for regulatory guidelines for the developing industry, as it has worked to shape the regulatory environment to its liking. "When you're thinking about traditional finance entering in and using some of this technology, they're being held back right now because there is this regulatory uncertainty," Summer Mersinger, CEO of the Blockchain Association and a former CFTC commissioner, said. "Having the regulators provide some sort of certainty is going to really open up the industry to more investment, more integration into traditional finance, and really grow the sector." And Coinbase CEO Brian Armstrong, who is a key industry player urging Congress to act on the Clarity Act, told CNBC after a failed Senate procedural vote on Sept. 15: "At this point, I don't think we can wait on Congress and the Senate." Senate banking committee Chairman Tim Scott, R-S.C., also called on federal agencies to set "clear rules of the road" for digital assets until Congress legislates. But new rules from federal agencies don't come quickly. When asked how the agency plans to regulate crypto, the CFTC pointed CNBC to Chair Michael Selig's Sept. 16 statement where he said, "President Trump promised to deliver a future-proof crypto asset regulatory market structure one way or the other, and we will help him get the job done using our existing statutory authorities." CNBC also reached out to the SEC regarding next steps for regulating the digital asset industry, and a spokesperson said the agency will consider a proposal to "modernize the rules around custody of investment adviser client assets and fund assets, including to address crypto assets." Caroline Pham, who served as acting CFTC chair from the day President Donald Trump took office for his second term until December, told CNBC that "a plan B to move forward at the agency level was always in the cards." Pham is now the CEO of MoonPay Institutional and chief legal officer and chief administrative officer for MoonPay, a crypto services provider. "You have to have a contingency plan," she said, explaining that the CFTC and SEC took that into account with the work the agencies have been doing since Trump's second term began. That includes the "Project Crypto" initiative introduced in July 2025 to modernize securities regulations and align the SEC and CFTC's crypto rules. In August 2025, Pham announced the CFTC would start implementing the recommendations from the President's Working Group on Digital Asset Markets. States target crypto scams As Washington grapples with crypto regulation, states are also fighting for the chance to regulate the asset class. In a Sept. 14 letter, a bipartisan coalition of state attorneys general urged the Senate Banking Committee to oppose the Clarity Act, arguing the bill displaces states' abilities to regulate securities markets. "We write to urge the Senate to expressly preserve the police powers of the states and ensure that the states remain armed with the tools necessary to protect the American people from predatory scammers," they wrote to Scott and the panel's top Democrat Sen. Elizabeth Warren, of Massachusetts. Aaron Klein, senior fellow in economic studies at the Brookings Institution, told CNBC he doesn't think states are best positioned to regulate national and international capital markets. "Capital market regulation, I think, needs to be done at the federal level," Klein, who was previously a top staff member for the Senate banking committee, said. "In terms of stopping fraud and scams, states have a lot of authority." He said that in the absence of a federal framework for crypto, states should be more aggressively monitoring payment processing and prosecuting criminals. Mersinger noted that state enforcement comes after a crime is already committed. "What we really need is the oversight from the federal side to make sure that we're not having these situations where [a] state AG has to come in and file a lawsuit because there was some bad actor involved or some of their constituents in their state were somehow harmed," she said. The midterm election is now taking center stage, but lawmakers haven't completely abandoned the Clarity Act. Sen. Thom Tillis, R-N.C., revised his vote to oppose the bill, allowing him to bring a motion to reconsider the legislation in the Senate. — CNBC's Tanaya Macheel and Garrett Downs contributed to this report.