SEC Chair Ready to Provide Crypto Rules if CLARITY Act Fails

The CLARITY Act may not make it out of the Senate alive this year, but that may not be a fatal blow to the digital asset market. Speaking to CNBC’s “Squawk on the Street” program on Monday (July 27), Securities and Exchange Commission (SEC) Chairman Paul Atkins said his agency stands ready to step in if Congress fails to act.

“Statute is a way of future-proofing something. We’re ready, willing and able to issue rules that address the same issues in CLARITY and other issues in the crypto market, and I think it behooves us to do that,” he said. “Should something not happen in Congress, then we stand ready to provide that.”

The CLARITY Act passed the House last July with broad bipartisan support, and passed the Senate Banking Committee in May by a vote of 15-9. Since then, however, the measure has stalled as opposition has grown among Democrats in the Senate, largely due to concerns over conflicts of interest for President Donald Trump and his family due to their extensive crypto trading.

The bill has not yet come to the floor and last week Senate Majority Leader John Thune, R-S.D., signaled that he does not expect it to come up for a vote before the Senate’s August recess, currently scheduled to begin Aug. 7. When Congress returns in mid-September, the Senate is likely to face a crowded and contentious legislative calendar ahead of the November midterm elections, including a possible short-term government funding bill and a must-pass defense authorization bill, pushing most other priorities off the agenda.

While the CLARITY Act would give the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over the spot market for digital assets, the SEC’s Project Crypto, unveiled by Atkins in November, includes a package of proposed rulemakings covering much of the same ground as the legislation, including token registration exemptions, broker-deal custody rules and trading venues. In particular, Atkins clarified that most crypto tokens are not securities and therefore beyond the reach of SEC regulations, leaving most oversight of crypto markets to the CFTC.

Atkins described it at the time as a bridge to the CLARITY Act.

“Ultimately, however,” Atkins told CNBC, “we need the certainty of statute to future-proof, so we have clear direction to go forward.” He said he remains optimistic that the legislation will ultimately pass the Senate and that his agency is working closely with lawmakers to provide technical assistance and respond to their questions and concerns.