Coinbase CEO Brian Armstrong says the Securities and Exchange Commission and Commodity Futures Trading Commission can continue building clear U.S. cryptocurrency rules under their existing authority, after the Senate failed to advance the industry’s flagship CLARITY Act.Armstrong made the comments following the September 15 procedural defeat of H.R. 3633, which received 49 votes in favor and 50 against, falling 11 votes short of the 60 needed to advance.The result leaves comprehensive federal market-structure legislation stalled after years of industry lobbying, but Armstrong argued that regulatory progress does not have to stop with Congress.”We can’t wait on Congress anymore,” Armstrong wrote following the vote, adding that he looked forward to working with the SEC and CFTC as they establish rules using powers already available to them.The position broadly matches the approach regulators themselves have taken over the past year. Both agencies are already pursuing coordinated rulemaking and interpretations intended to clarify how existing securities and commodities laws apply to digital assets.
SEC and CFTC Already Building Rules
The SEC took one of its largest steps on March 17 when it issued a formal interpretation defining how federal securities laws apply to different categories of crypto assets and transactions.The CFTC joined that interpretation with guidance explaining how it would administer the Commodity Exchange Act consistently with the SEC’s framework.That action followed the January expansion of Project Crypto into a joint SEC-CFTC initiative designed to harmonize federal oversight.The SEC has since gone further. On August 18, it proposed Regulation Crypto Assets, creating tailored securities-law exemptions for certain crypto fundraising transactions and a potential pathway for tokens originally connected to investment contracts to transition away from that status.The proposal remains open for public comment until October 20.The CFTC is pursuing its own agenda. Its Innovation Task Force is working on regulatory frameworks covering crypto assets, blockchain technologies and prediction markets, while Armstrong himself serves on the agency’s Innovation Advisory Committee alongside executives including Uniswap Labs CEO Hayden Adams and Polymarket CEO Shayne Coplan.These initiatives have a clear legal foundation in existing statutes, but the agencies cannot necessarily reproduce everything Congress sought to accomplish through CLARITY.
Agency Rules Cannot Fully Replace Legislation
The central limitation is durability. SEC Chairman Paul Atkins has repeatedly said Congress remains essential even as his agency moves independently. When unveiling Regulation Crypto Assets in August, Atkins described legislation as indispensable for creating “future-proofed” rules that cannot easily be reversed by a subsequent administration.CLARITY sought to resolve broader statutory questions, particularly the division of authority between the SEC and CFTC over crypto spot markets.Agency interpretations and regulations can clarify how regulators understand existing laws, but they cannot rewrite the statutes Congress enacted. They can also face court challenges and can potentially be modified or withdrawn by future commissions.That leaves the U.S. with two regulatory tracks following the Senate defeat.Congress could revive CLARITY or negotiate another market-structure bill, although its immediate path is uncertain. Meanwhile, the SEC and CFTC can continue using existing authority to establish rules governing areas including token issuance, securities classification, trading venues and market intermediaries.For Coinbase, which has spent years arguing that U.S. crypto businesses need explicit operating rules, Armstrong’s message represents a shift in emphasis rather than abandonment of legislation: congressional action remains desirable, but the industry is increasingly looking to regulators for the clarity Washington lawmakers have so far been unable to deliver.
