The chances of the CLARITY Act bill passing in 2026 have been slashed to 10% by Galaxy Digital, and the Securities and Exchange Commission (SEC) immediately took over the regulatory initiative. Days after legislative efforts to draft a digital asset regulatory framework stalled in Congress, the SEC released its own proposed rules. This new proposal promises a tailored framework for crypto investment contracts, which is claimed to be clearer and aligned with its original purpose.
The primary focus of this proposal is to resolve the dilemma between innovation and legal certainty. Under the proposal, crypto entities would have a legal pathway for raising capital, while maintaining investor protection layers. The SEC’s move fills the vacuum left by the legislation that was initially expected to become the United States’ first comprehensive regulatory framework for the crypto industry.
Time is Running Out
SEC Chairman Paul Atkins was apparently prepared for the legislative deadlock. On July 27, Atkins had already stated that his agency was ready, willing, and able to issue replacement guidelines if the Senate indeed failed to pass the legislation.
That prediction has now proven correct. According to Galaxy Digital’s report, several political issues surrounding the digital asset protection legislation remain unresolved. The remaining time for lawmakers is also nearly exhausted. When the Senate reconvenes on September 14, they will have only about two to three weeks to pass the rules before their term ends.
Ending Outdated Enforcement
This shift in the SEC’s policy direction has received full backing from its key figures. Commissioner Hester Peirce, known in the industry as “Crypto Mom,” praised the proposal as a leap forward. Peirce noted that the proposal steers regulators toward establishing rules of the game that are sensible, clear, and actually enforceable.
She did not hesitate to criticize her agency’s past actions. Peirce noted that an entire generation of industry players has continued to struggle due to the regulator’s reluctance to adapt. According to Peirce, the institution has long been too stubborn in forcing the application of a series of old rules that are completely ill-suited for the digital asset ecosystem.
Peirce’s critical views align with Atkins’ opinion. The chairman confirmed that the past approach of relying purely on enforcement actions has harmed many parties. Those aggressive tactics have proven to drive investment overseas. Ironically, this capital flight has limited the market watchdog’s capacity to protect local investors.
High-Level Intervention
The market watchdog’s new policy direction does not stand alone. Crypto assets have now drawn attention at the highest levels of the United States government. According to a report by the Reuters news agency on August 19, 2026, Donald Trump is preparing to host crypto executives in a special meeting. The agenda is set to discuss regulatory considerations from the SEC.
For industry players in the U.S., this proposed fundraising rule arrives at a critical juncture. With the legislative door nearly shut, the draft regulation serves as a legal lifeline for project developers to continue operating within legal boundaries.
Reported from Cointelegraph.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
