After Clarity Act Stalls, SEC And CFTC Take On Bigger Role

Yesterday, the Senate held the long-awaited vote on the CLARITY Act and failed to advance it. Today, the conversation had already shifted to what comes next.

Until this week, the industry had been focused on getting a comprehensive market-structure bill through Congress. With that path stalled for now, attention is shifting to what the SEC and CFTC can do under their existing authority.

I talked with Charley Cooper, President of Ava Labs and former CFTC Chief of Staff and Chief Operating Officer, at the Avalanche Summit today. “I can only speculate because I wasn’t in the room,” he said about the failed vote, “but I think there were multiple issues that came into play.” He cited concerns about yield-bearing stablecoins and the difficulty of moving partisan legislation in a midterm year. The result, he said, “wasn’t a surprise.”

Cooper expects the agencies’ existing rulemaking push to take on greater importance, but cautions on timing: “You’re probably looking at… six-plus months before you really begin to see these rules being done in earnest.” Still, he rejected the idea that the industry should wait. “The failure of the CLARITY Act to pass does not mean there’s a set of things we’re not allowed to do in crypto,” he said. “As an industry, we cannot sit on our hands waiting for permission to do things. That’s how industries die, and I can tell you crypto is well out of the box.” Avalanche itself, he added, is not changing course and will meet clients “where their risk tolerance takes them.”