Bernstein Expects Swift SEC and CFTC Rulemaking After CLARITY Act Vote Failure

Bernstein analysts expect the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission to move quickly on new digital asset rules after the Digital Asset Market Clarity Act failed to pass a Senate cloture vote on Tuesday. According to Cointelegraph, the analysts said in a Wednesday note shared with Cointelegraph that the agencies are likely to publish regulations to make up for time lost during negotiations over the CLARITY Act, which would have established the country’s first regulatory framework for digital assets. They said the expected measures could include token taxonomy rules for capital raising, developer protections for decentralized finance and self-custodial protocols, innovation exemptions for equity tokenization, faster approval timelines for real-world asset perpetual futures, and amendments to rules covering federal sports event contracts and their classification as swaps. Bernstein said these federal agencies could provide more regulatory clarity for the industry after the CLARITY Act failed to advance, describing the bill as one that would have “fool-proofed the industry against political regime shifts.” The analysts said a re-vote on the act appeared unlikely because of a limited time window and concerns over its ethics provisions. On Aug. 19, the SEC proposed new rules aimed at creating a “clear and fit-for-purpose framework for certain investment contracts involving crypto assets,” while allowing entities to raise capital with investor protections in place. The proposal includes exemptions allowing crypto companies to issue up to $5 million in tokens during four years and up to $75 million during 12 months, along with a safe harbor that would exempt cryptocurrencies from being treated as investment contracts. On July 27, SEC Chair Paul Atkins told CNBC that the agency was “ready, willing, and able to come out with rules” on digital assets if the Senate did not pass the CLARITY Act.