Bernstein Forecasts ‘Aggressive’ Rulemaking by SEC and CFTC Following CLARITY Act Failure

Failure of the CLARITY Act in the Senate and Its Implications

On Tuesday, the US Senate failed to pass a cloture motion on the Digital Asset Market Clarity (CLARITY) Act, which aimed to establish the country's first regulatory framework specifically for digital assets. Bernstein analysts considered a re-vote unlikely due to a narrow window of opportunity and contentious ethics provisions within the bill.

The failure of the bill leaves a regulatory gap that federal agencies—the SEC and CFTC—are expected to address through new measures.

Expected Actions from SEC and CFTC Following the Bill’s Failure

In a Wednesday note shared with Cointelegraph, Bernstein analysts forecasted aggressive and swift rulemaking efforts by the SEC and CFTC to compensate for the time lost during CLARITY Act negotiations.

The anticipated regulations include establishing token taxonomy relevant to capital raising, protections for developers involved in decentralized finance and self-custodial protocols, and innovation exemptions related to equity tokenization.

Additionally, faster approval processes for real-world asset perpetual futures and amendments to rules governing federal sports event contracts and their classification as swaps were expected.

Context of Recent SEC Proposals

On August 19, the SEC proposed new rules designed to create a clear and purpose-built framework for certain crypto asset investment contracts, enabling entities to raise capital while maintaining investor protections.

The proposed rules would allow crypto companies to issue up to $5 million in tokens during four years and up to $75 million in 12 months, and introduce a safe harbor effectively exempting certain cryptocurrencies from investment contract classification.

Earlier, on July 27, SEC Chair Paul Atkins told CNBC that the agency was ready and able to implement rules on digital assets should the Senate fail to pass the CLARITY Act.