The crypto industry’s effort to secure a comprehensive market-structure law suffered a major setback when the Senate failed to advance the Clarity Act in a 49-50 procedural vote, below the 60 votes required. Democrats opposed the measure, joined by three Republicans, after negotiations stalled over ethics provisions linked to President Donald Trump’s crypto ventures. Sen. Cynthia Lummis, the bill’s lead architect, called it effectively dead for the year. Within 48 hours, federal regulators began moving forward with separate initiatives. SEC Chairman Paul Atkins introduced an innovation exemption allowing qualifying venues to trade tokenized U.S. stocks on-chain without registering as national securities exchanges. The CFTC issued a no-action position covering passive software providers, including crypto wallet apps, that give users access to regulated derivatives without registering as introducing brokers, and sent a broader crypto-markets rulemaking to the White House for review. The Federal Reserve proposed rules requiring supervised stablecoin issuers to fully back tokens with safe, liquid assets and hold capital against operational risks as part of the multi-agency implementation of the GENIUS Act, signed by President Donald Trump in 2025. The OCC is working to finalize its stablecoin rules by November ahead of a January statutory deadline. The shift leaves crypto policy dependent on agency rulemaking, which can be slower to develop, more vulnerable to court challenges and easier for a future administration to reverse than legislation. Solana Policy Institute President Kristin Smith said the industry is now looking to regulators for guidance because that is the more viable path forward. The developments also mark a reversal from the SEC’s regulation-by-enforcement approach under former Chairman Gary Gensler during the Joe Biden administration.