Bernstein expects ‘aggressive’ rulemaking from SEC, CFTC, following CLARITY Act failure

Bernstein analysts expect “aggressive and swift” rulemaking from the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), after the Digital Asset Market Clarity (CLARITY) Act failed to pass a Senate cloture vote on Tuesday.

Bernstein analysts said the regulatory agencies will publish new regulations to “make up for the time lost negotiating the CLARITY Act,” in a Wednesday note shared with Cointelegraph.

The analysts said they expect agency regulations including token taxonomy for raising capital, developer protection measures concerning decentralized finance and self-custodial protocols, innovation exemptions for equity tokenization, faster approval times for real-world asset perpetual futures, and amendments to rules around federal sports even contracts and their classification as swaps.

Bernstein said that these federal agencies will bring more regulatory clarity for the industry, to compensate for the failure of the CLARITY Act, which would have “fool-proofed the industry against political regime shifts.” 

On Tuesday, the US Senate failed to pass a cloture motion on the CLARITY Act, which would have established the country’s first regulatory framework for digital assets. Bernstein’s analysts said that a re-vote of the act was unlikely, citing a limited time window and concerns over the bill’s ethics provisions.

On Aug. 19, the SEC proposed new rules to create a “clear and fit-for-purpose framework for certain investment contracts involving crypto assets,” allowing entities to raise capital while preserving investor protections. The proposed rules offer crypto companies exemptions allowing the issuance of up to $5 million in tokens during four years and up to $75 million during 12 months, as well as a safe harbor exempting cryptocurrencies from being treated as ”investment contracts.”

On July 27, SEC Chair Paul Atkins told CNBC that the agency was “ready, willing, and able to come out with rules“ on digital assets if the Senate failed to pass the CLARITY Act. 

Related: Deutsche Bank awaits regulatory nod to launch institutional crypto custody solutions