The SEC has sent the White House a proposal to clarify how investment advisers and companies must hold crypto assets, the regulator said this week. The package lands just as the Clarity Act, the sweeping digital asset market structure bill, slipped to September after Democrats balked at the latest draft.
What the proposal changes
The proposal aims to modernize custody rules for the crypto space. It includes amendments to existing custody regulations and would strip out provisions regulators say are no longer needed for investor protection. The SEC sent it to the White House after a vote on the Clarity Act was delayed.
The timing isn't an accident. The agency wants its own regime in motion even as Congress stalls.
Where the Clarity Act stands
Pro-crypto lawmakers had hoped to pass the Clarity Act before the August recess. That didn't happen. The vote now sits on the September calendar after Democrats rejected the latest draft. Some Republican senators, including Cynthia Lummis, have accused certain individuals of deliberately holding the bill back.
President Trump last week urged lawmakers to get it over the line. The bill would split oversight of digital assets between the SEC and CFTC and settle a years-long fight over which agency governs what.
The CFTC is moving anyway
CFTC Chairman Michael Selig said he'll proceed with rulemaking whether or not the Clarity Act is enacted, with an eye toward finalizing rules before the administration's term ends. That's a clear signal the CFTC isn't waiting for Congress.
Earlier this month, the SEC also proposed its own framework to let token issuers raise money in the U.S. without violating securities laws. Two regulators, two tracks, and the Clarity Act stuck in the middle.
A different regulatory tone
Since taking office, regulators have taken a different approach to the digital asset space. SEC Chair Paul Atkins said he's committed to supporting Congress in advancing the Clarity Act, but he's also pushing ahead with his own rulemaking. Trump campaigned on a pro-crypto ticket and collected major backing from Silicon Valley entrepreneurs.
The Senate is expected to take up the Clarity Act in September. The SEC's custody proposal is now under White House review, and the CFTC is working toward final rules. Whether those tracks converge with what Congress eventually passes, or run ahead of it, is the open question hanging over the next few weeks.
