Bernstein: The U.S. SEC and CFTC may accelerate the formulation of cryptocurrency regulations after being stalled by the CLARITY Act

According to Cointelegraph, Bernstein analysts stated that after the failure of the CLARITY Act to pass the Senate procedural vote, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are expected to "actively and swiftly" advance the formulation of digital asset regulations to make up for the time spent on previous bill negotiations.

Bernstein anticipates that the new regulations may cover token classifications for financing, protective measures for DeFi and self-custody protocol developers, exemptions for stock tokenization innovations, expedited approvals for perpetual contracts of real-world assets, and revisions to rules related to sports event contracts and their swap classifications. Relevant agencies may provide additional regulatory clarity for the industry through administrative rules.

Analysts believe that the CLARITY Act could have reduced the risk of the regulatory framework being adjusted with changes in the political environment through legislation, but due to limited remaining legislative time and controversies over ethical provisions, the likelihood of the bill being voted on again is low.

The SEC had previously proposed a new framework applicable to certain crypto asset investment contracts, intending to allow entities to issue tokens not exceeding $5 million within 4 years, or tokens not exceeding $75 million within 12 months, and set up safe harbor arrangements. SEC Chairman Paul Atkins had also stated that if Congress fails to pass the CLARITY Act, the agency has the ability to formulate digital asset rules on its own.