The CLARITY Act, Congress's flagship attempt to set market-structure rules for digital assets, has stalled in the legislative pipeline, while Securities and Exchange Commission Chairman Paul Atkins and Commissioner Michael Selig press ahead with a regulatory agenda of their own, according to a report from the Bitcoin Foundation.

The development leaves the crypto industry facing a bifurcated path: statutory reform that would definitively divide jurisdiction between the SEC and the Commodity Futures Trading Commission remains frozen, while agency-level rulemaking — reversible, slower to litigate, but immediately actionable — moves forward.

Why does the CLARITY Act's stall matter?

The CLARITY Act is the House's central vehicle for answering the industry's most persistent question: which tokens are securities and which are commodities, and which regulator polices which market segment. Its legislative momentum has now slowed, removing near-term certainty for exchanges, broker-dealers and token issuers that have structured operations around the expectation of statutory safe harbors.

Without the statute, the SEC retains primary discretion over what constitutes an investment contract, and market participants must continue to reason from enforcement outcomes and case-by-case guidance rather than bright-line rules.

What are Atkins and Selig doing instead?

SEC Chairman Paul Atkins and Commissioner Michael Selig are advancing new crypto rules through the commission's own processes, according to the report. Agency rulemaking does not require congressional action, which makes it the operative track for compliance planning while the CLARITY Act sits idle.

For regulated entities, the practical consequence is a shift in focus: legal teams will parse SEC releases, proposed rules and no-action positions rather than committee markups. The distinction matters for durability — a statute survives administration changes, while commission rules can be revisited by future leadership.

What does this mean for market structure?

The stalled legislation and active rulemaking together signal that the near-term shape of US crypto regulation will be administrative, not statutory. Firms building custody, trading and issuance infrastructure must plan around SEC-defined parameters that can shift with the agency's composition, rather than the more settled framework the CLARITY Act promised.

It also keeps the CFTC's role in spot crypto markets unresolved. Jurisdictional boundaries between the two agencies were a core object of the stalled bill, and their delineation now depends on how far the SEC's new rules reach.

Industry participants had treated the CLARITY Act as the mechanism that would lock in definitional clarity for token classification. With that off the table for now, the burden of interpretation returns to agency staff, courts and, ultimately, the commissioners themselves — including Atkins and Selig, who now carry the rulemaking weight Congress declined to lift.

Attention shifts to the SEC's upcoming rulemaking calendar and to any procedural motion that could revive the CLARITY Act in the current session.