SEC Chair Paul Atkins says the agency will issue crypto market rules if the CLARITY Act stalls in Congress. Here's what the SEC's backup plan means.
The U.S. Securities and Exchange Commission (SEC) is preparing to move ahead with crypto regulation even if Congress fails to pass the long awaited CLARITY Act.
SEC Chair Paul Atkins said the agency is "ready, willing and able" to introduce crypto market rules under its existing authority.
Speaking in a CNBC interview, Atkins said he remains optimistic that lawmakers will pass the CLARITY Act and confirmed that the SEC is actively assisting Congress by providing technical guidance throughout the legislative process.
However, he made it clear that the agency is also preparing for another scenario.
"If Congress ultimately doesn't act, we're ready, willing and able to move forward with rulemaking."
He also added that the SEC has sufficient authority to address several crypto market issues under existing securities laws.
Instead of relying primarily on lawsuits and enforcement actions, the regulator is preparing a framework that would establish clearer rules for crypto companies operating in the United States.
Still, Atkins stressed that SEC regulations cannot fully replace legislation passed by Congress.
"We need the certainty of a statute that will help future-proof" the crypto market, he said, arguing that only federal law can provide durable regulatory certainty across future administrations.
If the CLARITY Act remains stalled, the SEC is expected to launch a broader regulatory initiative focused on crypto market structure.
The agency's planned framework would likely introduce clearer exemptions for certain token offerings, helping blockchain projects raise capital without automatically treating every token sale as a traditional securities offering.
The SEC is also expected to clarify when a blockchain network has become sufficiently decentralized to no longer fall under securities regulations.
Another priority is updating custody rules so broker-dealers can more easily hold digital assets for clients.
Atkins has also noted closer coordination with the Commodity Futures Trading Commission (CFTC), particularly as both agencies work toward a clearer division of oversight between digital securities and digital commodities.
Although SEC rulemaking could provide faster regulatory guidance, it would not carry the same legal weight as congressional legislation.
The CLARITY Act would establish a permanent statutory framework defining the responsibilities of the SEC and CFTC, create legal classifications for different digital assets, and provide long-term protections that cannot easily be reversed.
By contrast, SEC rules are administrative regulations created under the agency's existing authority.
Perhaps future administrations could amend or repeal them, and courts could also overturn portions of the framework if challenged.
Despite strong bipartisan support, the CLARITY Act faces an increasingly tight timeline. The legislation previously cleared the House of Representatives with a 294-134 vote and advanced through the Senate Banking Committee on a 15-9 vote.
However, it still requires at least 60 votes on the Senate floor before becoming law. Negotiations have slowed over several unresolved issues, including ethics provisions involving elected officials' crypto holdings and other regulatory details.
Senate Majority Leader John Thune has indicated the bill is unlikely to clear Congress before lawmakers begin their August recess, while Senator Cynthia Lummis has warned that missing the early August window could push final action into 2027.
Meanwhile, odds on Prediction markets like Polymarket have lowered the probability of the CLARITY Act passing this year to 26.5%.
So, if Congress misses its opportunity this summer, the SEC may become the primary driver of U.S. crypto regulation until lawmakers return to the issue.
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