U.S. GENIUS Act Stalls in Senate as SEC and CFTC Move to Set Rules Independently
nashnova research
Just two days after crypto legislation failed a Senate procedural vote, the SEC and CFTC each acted on the same day — one opening a temporary trading channel, the other submitting a rule proposal to the White House. This means → federal regulators are no longer waiting for Congress and are building the framework themselves.
Where did Congress get stuck?
The Digital Asset Market Structure Clarity Act failed a Senate procedural vote — it did not even clear the threshold to enter formal debate.
At the same time, a bipartisan coalition of state attorneys general sent a letter to the Senate Banking Committee opposing the bill, arguing it would undercut states' power to regulate securities markets.
This means → the bill is not dead, but it is shelved — and opposition is coming from both the Senate floor and the states.
What did the SEC and CFTC actually do?
Just two days after the Senate vote stalled, the SEC invoked existing authority to issue an order opening a temporary channel for tokenized stock trading — traditional equities traded on blockchain rails — pushing markets toward round-the-clock operation.
On the same day, the CFTC submitted a crypto-regulation rulemaking proposal to the White House Office of Management and Budget. Details are not yet public, but OMB confirmed the rule is under review.
In plain terms = both agencies sent the same signal: if Congress can't legislate, we'll use the powers we already have.
Why stop waiting for Congress?
Coinbase CEO Brian Armstrong told CNBC after the vote failed: "We can't wait for Congress and the Senate any longer."
Senate Banking Committee Chair Tim Scott, a Republican, also called on federal agencies to establish "clear rules" for digital assets ahead of legislation.
This reflects an industry consensus hardening in real time: the legislative timeline is uncontrollable, and the cost of a regulatory vacuum is no longer bearable.
Was "Plan B" already in the works?
Former acting CFTC Chair Caroline Pham revealed that "advancing Plan B at the agency level was always part of the contingency" — both regulators had been preparing since the start of Trump's second term.
A concrete step: the Project Crypto initiative launched in July 2025, aimed at modernizing securities regulations and harmonizing SEC and CFTC crypto rules.
CFTC Chair Michael Selig was blunt: "President Trump committed to achieving a future-facing crypto regulatory market structure by any means, and we will use our existing statutory authority to help deliver that."
What are the feds and the states fighting over?
The state attorneys general coalition argues: if the Clarity Act passes, states' power to regulate securities markets would be hollowed out.
Brookings Institution senior fellow Aaron Klein takes the opposite view: capital-market regulation belongs at the federal level, and states already have ample authority to prosecute fraud and scams.
In plain terms = the feds would decide "who gets on the road," the states would police "who breaks the rules on the road" — but with the bill shelved, nobody's drawing that line.
How long until regulatory certainty actually arrives?
Blockchain Association CEO Summer Mersinger named the core bottleneck: "Regulatory uncertainty is holding back traditional financial institutions from entering this market."
She argued that any degree of certainty from regulators would unlock more investment, deeper integration with traditional finance, and sector-wide growth.
But the reality: although the agency-driven rulemaking channel is now open, rule-writing cycles are typically long — when the certainty the crypto industry craves will actually land remains the central unresolved question.
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