The Digital Asset Market Clarity Act's failure to advance in the Senate has shifted the next phase of U.S. crypto regulation to the Securities and Exchange Commission and the Commodity Futures Trading Commission, opening prospects for more trading and investment to move onchain while leaving a central question unresolved: how much certainty can regulators deliver without Congress?

Interviews with senior executives and legal experts suggest broad agreement that regulation will keep moving. Their expectations diverge over whether agency action can become a durable foundation or leave businesses adapting to rules that remain vulnerable to political and legal change.

Lev Breydo, an assistant professor of law at William & Mary Law School, said Clarity exposed divisions within the industry, from ethics provisions to the yield fight with community banks.

"A coalition that looked unified against Gensler found out definitions create winners and losers," Breydo said.

Despite the setback, the agencies are moving quickly to fill the regulatory gap.

What have the SEC and CFTC already done?

The SEC's five-year "Innovation Exemption," introduced September 17, lets qualifying venues trade tokenized U.S. stocks through blockchain liquidity pools while the commission works on permanent rules.

The CFTC followed on October 5, seeking feedback on rules for leveraged retail crypto trading and a new registration category for crypto markets. That process starts a lengthy public comment and rulemaking cycle rather than putting rules into effect.

The SEC's October 1 custody proposal would let state trust companies safeguard client crypto and allow advisers and funds to hold it themselves under certain conditions.

Looking toward 2027, Breydo said he expects the SEC to focus on completing offering and custody rules and building on its tokenized-stock exemption. He views the agencies' March joint interpretive release as an important foundation, superseding earlier guidance and allowing coordination within existing law.

But a key gap remains. Ordinary, unleveraged spot trading still lacks comprehensive federal oversight, beyond the CFTC's anti-fraud and anti-manipulation powers. Closing that gap was a central goal of Clarity.

Why could failure speed commercial activity?

For some executives, the legislative setback could produce faster commercial opportunities.

"The SEC and CFTC are already moving proactively to provide the regulatory certainty markets need, and that's unlocking a wave of M&A across digital assets, traditional financial services, and fintech alike," said Paul McCaffery, head of digital assets at investment bank KBW.

Bitwise Chief Investment Officer Matt Hougan said he sees the agency approach as more favorable in the short term than legislation that would have required years of follow-up rulemaking. He also expects more protocols to adopt token buybacks, particularly buy-and-burn models, following SEC clarification he said gives investors greater confidence.

Developers are watching whether regulators distinguish writing software from running a financial intermediary. Cathy Yoon, chief legal officer at Solana-focused research and development firm Temporal, said she hopes the SEC will recognize developers as software creators without turning their work into a securities enterprise.

"The fact that the SEC staff is even willing to say these things explicitly is a win," Yoon said, while noting staff FAQs are not SEC rules.

Michael Lie, global head of digital assets at market maker Flow Traders, said he sees comprehensive regulation as inevitable as finance moves toward 24/7 trading. He is watching innovation exemptions and changes to transfer-agent rules, with European and Asian regimes already advancing.

Can agency rules pass the durability test?

Legal experts see progress arriving in stages, with implementation the hardest part.

"The biggest gap is implementation," said Derek Lowrey, head of legal at Newton Labs, formerly known as Magic Labs. Without legislation, overseeing venues, intermediaries, decentralized finance and spot markets remains harder, he said. Existing anti-money laundering, sanctions and record-keeping obligations nevertheless give compliant teams a basis to keep building.

Kevin Kreuser, general counsel at domain-name tokenization firm D3, said tokenized real-world assets particularly need clearer jurisdictional boundaries.

"Agency action is welcome, but it does not provide the same long-term certainty as legislation," Kreuser said.

Jim Petrila, chief legal officer at Dromos Labs, which develops Aerodrome and Velodrome, takes a more bullish view. Growing liquidity and tokenized securities on public blockchains could make regulatory reversal impractical within two years.

"For DeFi, the signal is bullish," Petrila said.

Still, the benefits may be uneven. Hougan argued Clarity's failure preserves a regulatory moat for Coinbase, Kraken and other incumbents, delaying competition that could lower costs. The emerging outlook is faster experimentation, but unresolved questions over who can compete and how firmly the new rules will hold.

Breydo said only Congress can deliver a comprehensive framework with statutory durability.

The CFTC's October 5 comment process and the SEC's pending custody rulemaking now form the near-term calendar that will determine how much of the Clarity agenda agencies can deliver on their own.