SEC Set to Propose "Regulation Crypto" as CLARITY Act Hits Roadblock

The U.S. Securities and Exchange Commission is scheduled to vote on Friday, August 14, on whether to propose "Regulation Crypto," a tailored offering framework that would be the agency's first major crypto rulemaking under Chair Paul Atkins. The move comes after the Senate departed for its August recess without advancing the CLARITY Act, legislation designed to split oversight of digital assets between the SEC and the Commodity Futures Trading Commission (CFTC). With Congress sidelined, regulators are positioned to take the near-term lead. SEC Crypto Proposal Heads to an Open Meeting Official notices show the SEC will hold an open meeting at 10 a.m. ET at its Washington headquarters, with a live webcast. The agenda lists a single item from the Division of Corporation Finance. Commissioners will decide whether to issue a proposing release that would outline rules giving token offerings a dedicated compliance pathway. Under the concept, qualifying projects could raise capital through exemptions rather than completing full securities registration. The SEC has not published the text ahead of the vote. The initiative stems from "Project Crypto," the package Atkins added to the SEC's 2026 agenda. Key elements include registration exemptions for token sales, safe harbors for projects working toward decentralization, and custody standards for broker-dealers. In a late-July CNBC interview, Atkins said the SEC is prepared to proceed without legislation, though he reiterated a preference for Congress to act. "Statute is the way to futureproof something," he said. Senate Recess Leaves Regulators Out Front According to American Banker, Democrats blocked floor action over an ethics carveout tied to President Trump's crypto holdings. Republicans Josh Hawley and Jerry Moran also opposed the bill's stablecoin yield language, aligning with community banks. Senate Majority Leader John Thune said the measure would be first up when lawmakers return, setting the stage for a possible September vote. The bill would still need 60 votes, and Thune's cloture plan hinges on Democratic support that has not yet emerged. Some market observers argue the industry can move forward even without the legislation. Grayscale research head Zach Pandl said passage appears unlikely in 2026 regardless. CFTC Echoes the Same Warning The SEC is not alone in pressing forward. In a July Fox Business interview, CFTC Chair Michael Selig cautioned that regulators will end up writing the crypto rulebook if Congress does not deliver, while urging senators to pass the bill to provide federal certainty for businesses. The SEC and CFTC have already been working in tandem. Their March joint interpretive rule said most tokens fall outside securities law and carved out staking, mining, and airdrops. Atkins has acknowledged that agency-led rules are less durable than legislation, since a future administration could reverse policies not codified by Congress. That risk also applies to the March guidance. A favorable vote on August 14 would launch a public comment period rather than finalize any requirements. The proposal's exemption thresholds and eligibility tests will be closely watched as a signal of how far the SEC intends to go without Congress. The Senate's return in September will indicate whether lawmakers reassert control over the final framework.