The congressional sponsor of the Clarity Act has stated that rulemaking by the Securities and Exchange Commission and the Commodity Futures Trading Commission cannot substitute for comprehensive digital asset legislation, according to remarks reported by PYMNTS.

The declaration goes to the heart of the current US regulatory standoff. Both agencies have advanced crypto-related guidance and enforcement positions, but the Clarity Act's sponsor argues that only statute can durably assign jurisdictional boundaries between the two regulators and provide market participants with legal certainty.

What is the Clarity Act?

The Clarity Act is a market-structure bill before Congress that seeks to define which regulator oversees which digital asset activities. Its central task is dividing turf between the SEC, which polices securities markets, and the CFTC, which oversees commodities and derivatives. Crypto firms have long complained that token classification depends on which agency is asking, leaving exchanges and issuers exposed to overlapping claims.

The sponsor's position, as reported, is direct: administrative rulemaking by either agency cannot replace legislation. Rules can be revised by future commissions, challenged in court, or reversed by subsequent administrations. Statute, by contrast, fixes the framework.

Why agency rules fall short

The argument rests on the institutional limits of SEC and CFTC authority:

• Each agency can only regulate within its existing statutory mandate, so neither can unilaterally resolve which tokens are securities versus commodities.
• Agency guidance does not bind courts, and litigation outcomes can diverge from regulatory positions.
• Rulemaking is vulnerable to political turnover at the commissions, creating regime risk for businesses making long-term capital decisions.
• Only Congress can allocate jurisdiction between the two agencies and establish obligations for secondary-market trading of digital assets.

For crypto businesses, the distinction is operational, not academic. A statutory division of authority determines which registration regime an exchange must enter, which disclosure obligations apply to token issuers, and whether a platform can list assets without triggering securities enforcement.

Consequences for market structure

The sponsor's comments signal continued congressional intent to move the Clarity Act despite whatever interim rules the SEC and CFTC adopt. Firms that structure compliance around agency guidance alone may face re-engineering costs if legislation later assigns their activities to a different regulator with different requirements.

The statement also constrains expectations around administrative relief. If the leading sponsor of the market-structure bill regards SEC and CFTC rules as insufficient by construction, industry participants cannot treat forthcoming rulemakings as a substitute for legislative clarity on token classification and exchange registration.

What happens next

The Clarity Act remains pending in Congress, and its sponsor has now put on record that the legislative route is the only durable one. The practical question for market participants is timing: whether the bill advances through committee and floor votes before the SEC and CFTC finalize competing guidance, or whether agencies fill the gap first and Congress legislates later over the top of it. Until a bill is signed, the division of crypto jurisdiction between the two agencies stays formally unresolved.