The White House set a March 1st deadline for the banking industry and crypto firms to reach a deal on stablecoin yield, clearing the way for the Clarity Act, the market structure legislation meant to put the industry on a solid legal foundation in the U.S.
Clarity was passed by the House seven months ago. The Senate has set many deadlines to move it, and they have all gone unmet. The latest deadline also blew by with no deal.
The crypto industry has been fixated on legislation as the next catalyst, as if it is the only path toward the long-needed regulatory clarity in the world’s largest economy.
But legislation is not the only path.
The existing laws that provide authority to the market regulators at the Securities and Exchange Commission and the Commodity Futures Trading Commission are broad and flexible. Those agencies are acting now.
Fresh legislation would ensure against future Gary Genslers, but Gary Gensler’s era is done. President Donald Trump appointed a friendly chair to bless the industry just as Gensler had appointed a hostile one to bedevil it.
And while everything else that Trump has done vis-à-vis crypto has created political headwinds, it could be that all he really needed to do was pick the right chief for the SEC, and I suspect he has.
Trump appointed a veteran, Paul Atkins, who knows how to write regulations that will withstand legal challenges. Trump then appointed one of Atkins’ deputies to lead the other investment agency, the CFTC, ensuring rulemaking harmonizes across markets. All the industry has to do in order not to screw this up is avoid another FTX-like implosion.
It’s crypto’s game to lose.
Not his first rodeo
Paul Atkins served for six years at the SEC in the 2000s, serving under three different chairs. Since then, he has served as an advisor to the Chamber of Digital Commerce and to Securitize.
He was sworn in April 2025. A few weeks later, he spoke at an event at the SEC office, saying the agency has the authority to grant the crypto industry the rulemaking it needs to operate.
Later, before a dozen or so reporters, he was asked whether he needed to wait for Congress to write market-structure legislation before he could act. He repeated that his staff can and would act with or without new legislation.
Atkins confidently promised action, like a regulator who understands the scope of his existing authority.
Harmonization
And Atkins will be aligned with the chief of the SEC’s sister agency, the CFTC.
Gensler was never aligned with Rostin Benham, the CFTC’s prior chief. Benham kept asking Congress to take action, which Gensler kept saying wasn’t necessary.
Benham clearly did not believe every coin was a security, but Gensler believed that only Bitcoin was clear of his scrutiny. They were not harmonized.
But to effectively regulate and give founders confidence, it’s key that the agencies don’t fight about when and if a digital asset can move from SEC jurisdiction to the CFTC’s.
So I believe one of the key reasons that Atkins hasn’t already posted draft rules for public comment is that he wanted to do so in concert with the CFTC. However, Trump switched gears on appointing a chair for that agency, and the new helmsman, Michael Selig, didn’t get sworn in till the end of December.
It would not be surprising if, one day, we learn that Atkins convinced the president to change course on CFTC chair appointments to ensure the two agencies work well together.
Expect an official memorandum of understanding between the two agencies delineating responsibilities soon. This arrangement will be reminiscent of the historic Shadd-Johnson accord of 1981.
The new sheriff
By this fall, I suspect, Project Crypto will have submitted draft rules — each written in consultation with the other — before their respective commissions.
By next Spring, those rules will have been amended based on public comments and, most likely, finalized.
This will be the first administration to actually write rules with decentralized financial networks in mind.
Under new rules, it should be possible, for example, for exchanges like Kraken, Coinbase, and Crypto.com to finally say that all their operations are registered with an agency and under state supervision.
It should also be possible for new enterprises to raise funds with token sales. Some of those tokens will likely enjoy rights that entrepreneurs avoided during the regulation-by-enforcement era, such as the ability to distribute revenue.
Provided the rules are written conservatively enough to survive court challenges, the industry is likely to have two or three years to grow before it’s even possible to roll back the work of Atkins and Selig (because doing so will require both a Senate appointment process and a fresh rulemaking process).
Fait accompli
While we all know that crypto has always been an industry that welcomes new participants, the president’s family didn’t do digital assets any favors by launching memecoins, a stablecoin, and bitcoin miners. Those activities might have been enough to torpedo any hope of satisfying the crypto lobby’s ambitions for this session of Congress.
But while Congress dithers, agency staff are writing rules.
If the SEC and CFTC collaborate effectively–both agency leaders announced today that several crypto polices are coming–whatever arrangement they devise may eventually become law anyway. After all, Congress codified the Shadd-Johnson accord in the early 80s.
So the lobbyists may ultimately get the legislation they want, but only after crypto has gone mainstream anyway — without Congress, which is why Trump’s decision to appoint Paul Atkins may already have been sufficient to give the industry enough legal whitespace to reach its potential.
