Federal Agencies Poised to Lead Next Phase of US Crypto Regulation Amid Midterm Elections
Amid the US midterm elections, where control of Congress is uncertain, Maylea Ma, deputy general counsel at 1inch, expressed her expectation that federal agencies will spearhead the forthcoming phase of cryptocurrency regulation.
The elections could alter the stalled progress of the CLARITY Act; however, Ma emphasized that substantial advancements in US digital asset regulation over the coming years will originate from the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Treasury Department, rather than Congress.
Ma further noted that these federal bodies are increasingly engaging directly with crypto projects. Despite this growing interaction, it does not guarantee the regulatory stability the industry had hoped to achieve through legislation.
"The long-term aim remains legislation that remains unaffected by changes in government leadership," Ma stated, highlighting the need for enduring legal frameworks.
Institutional investors are also influenced by this regulatory uncertainty, as Michael Ho, co-founder of D3 and part of the Doma Protocol team, pointed out.
Ho explained that with the market structure bill at a standstill, US crypto policy largely depends on agency guidance vulnerable to reversal by future administrations, causing significant capital to hesitate.
He added, "Ultimately, clear, legally enshrined rules will be essential to attract institutional investment into tokenized real-world assets."
In August, the SEC introduced a framework for crypto fundraising, which included exemptions for specific token offerings and a safe harbor provision to avoid classification as investment contracts. Additionally, in September, the SEC updated its staff guidance concerning token buybacks, crypto networks, and staking receipt tokens.
Concurrently, the CFTC submitted its regulatory framework for the crypto market to the White House on September 17, just two days after the Senate failed to advance the CLARITY Act.
The ongoing delays and uncertainty in legislative solutions underscore the increasing role of federal agencies, highlighting a critical juncture for the future governance of digital assets in the US.
Why it matters
This development signals a shift towards regulatory clarity through federal agencies rather than congressional legislation, which is crucial for securing long-term industry stability and attracting significant institutional investment into the crypto sector.
Prepared from the source material with AI-assisted editing and checked against the supplied facts.
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