The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission are both moving forward with cryptoasset rulemaking initiatives after Congress failed to pass the CLARITY Act, leaving the two market regulators to define the perimeter of digital asset oversight without new statutory authority.

The failed CLARITY vote removed, for now, the legislative vehicle that lawmakers had positioned as the primary fix for the long-running jurisdictional dispute between the SEC and the CFTC over which digital assets qualify as securities and which fall under commodities law. That dispute has shaped enforcement strategy, listing decisions and market structure for years, and its resolution by statute now shifts to a future congressional calendar.

In the vacuum, both agencies are proceeding through their existing administrative authority. The SEC and the CFTC each maintain active rulemaking agendas that address cryptoassets, and both have signaled that they intend to use formal rule processes — advance notices of proposed rulemaking, proposed rules and interpretive guidance — rather than rely solely on case-by-case enforcement to establish where digital assets sit in the federal regulatory framework.

The operational stakes are considerable. Market infrastructure — exchanges, brokers, custodians and clearing firms — currently maps compliance obligations against a fragmented set of definitions. An SEC classification pulls an asset and its intermediaries into securities registration, disclosure and trading rules administered under the Securities Exchange Act and related statutes. A CFTC classification routes the same activity into the derivatives and spot-market authorities the commission holds under the Commodity Exchange Act. For trading venues, the difference determines registration pathways, capital and custody requirements, and which regulator examines their books.

The CLARITY Act was designed to draw that line by statute, assigning certain digital asset transactions to CFTC jurisdiction and creating pathways for assets to migrate between regulatory categories. Its failure means the line will be drawn, at least in the near term, by the agencies themselves — through rulemaking that is slower, more contestable in court, and more vulnerable to reversal when commission compositions change.

For crypto businesses, the practical consequence is a continued dual-track compliance posture. Firms operating trading platforms, custody services or token issuance programs must plan against both regulators' agendas simultaneously, and against the possibility that a future Congress revisits and passes a version of the market-structure legislation that just stalled. Legal teams at major exchanges have spent years maintaining exactly this dual readiness, and the failed vote extends that posture indefinitely.

The rulemaking push also carries procedural weight. Formal rulemaking under the Administrative Procedure Act requires notice, public comment and reasoned justification, which produces a more durable — and legally challengeable — record than enforcement actions. It gives market participants a window to shape definitions through comment letters, and gives courts a clearer basis for review when rules are finalized. That is a meaningful shift from the enforcement-led approach that defined much of the prior regulatory era for cryptoassets, in which agency positions were articulated through litigation rather than through codified rules.

Industry participants should watch two timelines. First, the agencies' semiannual regulatory agendas, which will show when proposed cryptoasset rules are scheduled for publication and comment. Second, the congressional calendar, since sponsors of the market-structure legislation have signaled continued interest in reintroducing it, and any renewed push would interact with — and potentially supersede — rules the agencies finalize in the interim.

The next concrete milestone is the release of proposed rule text and the opening of public comment periods at either agency. Until one of those drops, or Congress revives the legislation, the dividing line between securities and commodities regulation for digital assets remains an administrative construction, built agency by agency, rule by rule.