The crypto industry's hopes for congressional legislation on digital assets just collapsed, but major exchanges like Coinbase are signaling that regulatory clarity will still emerge, just through a different path. On September 15, 2026, the CLARITY Act failed to advance in a Senate procedural vote, marking a significant setback for the crypto lobby's push for legislative certainty. However, rather than viewing this as a total loss, exchange leaders are now pivoting to expect the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to fill the regulatory gap using their existing authority.

What Happened to the CLARITY Act in Congress?

The CLARITY Act, which was designed to establish clearer rules for stablecoins and digital asset payments, fell short in the Senate despite heavy lobbying from the crypto industry. According to reporting on the vote, Democrats opposed the bill unanimously, and three Republicans defected, citing banking ties as their reason. The bill failed to secure the 60 votes needed for cloture, a procedural step required to advance legislation in the Senate. Ripple CEO Brad Garlinghouse blamed anti-crypto political motives for the bill's failure, though he expressed hope that the SEC and CFTC would step in to establish regulatory frameworks.

Why Are Exchanges Now Looking to Regulators Instead?

Coinbase CEO Brian Armstrong acknowledged the disappointment but argued that waiting for Congress is no longer viable.

"The SEC and CFTC already have the tools they need under existing authority to create clear rules for digital assets," Armstrong stated, adding that he expects the agencies to begin that work in earnest.

Brian Armstrong, CEO at Coinbase

Armstrong also noted that the crypto industry made difficult concessions during CLARITY Act negotiations, suggesting that regulatory clarity through the agencies might actually produce better outcomes.

This shift reflects a broader recognition that the legislative path has become too unpredictable. The CLARITY Act's failure signals that Congress remains divided on crypto regulation, with banking interests and partisan concerns outweighing industry lobbying efforts. By contrast, the SEC and CFTC have already begun developing frameworks for digital assets, and both agencies have indicated they can move forward without new legislation.

What Role Will the SEC and CFTC Play Going Forward?

The SEC and CFTC have broad authority over securities and commodities markets, respectively, and both agencies have been gradually clarifying their positions on crypto assets. Armstrong's comments suggest that exchanges expect these regulators to establish clearer rules around stablecoin rewards, custody requirements, and trading practices. The GENIUS Act, which has already been enacted, provides some guidance on stablecoin regulation and is more permissive than the CLARITY Act on stablecoin rewards, according to Armstrong.

The regulatory approach through existing agency authority differs from legislative action in several key ways. Regulators can issue guidance, rules, and enforcement actions more quickly than Congress can pass bills, but their authority is also subject to legal challenges and can shift with new administrations. Exchanges are betting that this path, while less certain than legislation, will at least provide the clarity they need to operate without constant regulatory uncertainty.

How Are Exchanges Adapting to This New Reality?

Beyond Coinbase, other major exchanges are also positioning themselves for a regulatory environment shaped by agency action rather than legislation. The broader crypto market has already begun adjusting to the CLARITY Act's failure. On September 16, 2026, Bitcoin (BTC) fell 2.7% to $75,685.19, while Ethereum (ETH) dropped 4.6% to $2,396.07, reflecting investor sentiment shift from "Greed" to "Neutral" as measured by the Crypto Fear and Greed Index. The global crypto market capitalization declined 3.3% to $2.67 trillion over the same period.

Exchanges are also exploring new infrastructure to support institutional adoption and regulatory compliance. For example, X (formerly Twitter) launched a new Cashtag Partner Program that adds "Trade" buttons linking to Interactive Brokers, Moomoo, Gemini, Kraken, and Coinbase for stocks and crypto assets, expanding access to digital assets through mainstream platforms. This type of integration suggests that exchanges are preparing for a future where regulatory clarity comes through agency guidance rather than congressional mandate.

Steps Exchanges Are Taking to Navigate Regulatory Uncertainty

• Engaging with Regulators: Exchanges are increasing direct dialogue with the SEC and CFTC to understand how existing regulatory frameworks will apply to digital assets, rather than waiting for new legislation.
• Strengthening Compliance Infrastructure: Exchanges are investing in custody solutions, identity verification systems, and transaction monitoring to meet regulatory expectations even before formal rules are finalized.
• Expanding Institutional Partnerships: Exchanges are building relationships with traditional financial institutions and payment networks to demonstrate that crypto markets can operate safely within existing regulatory structures.
• Diversifying Revenue Streams: Exchanges are exploring new products like tokenized assets, stablecoin services, and AI-driven trading tools to reduce dependence on regulatory clarity for core business operations.

What Does This Mean for Crypto Investors and Users?

The shift from legislative to regulatory clarity has practical implications for how exchanges operate and what services they can offer. Regulatory guidance from the SEC and CFTC will likely be more incremental and narrower in scope than a comprehensive law like the CLARITY Act would have been. This means that certain questions about stablecoin issuance, custody standards, and trading practices may remain unsettled for longer, creating ongoing uncertainty for both exchanges and their users.

However, the regulatory approach also has advantages. Agency guidance can be updated more quickly as markets evolve, and it avoids the political compromises that often dilute legislative solutions. Armstrong's comment that the industry "made some concessions in the CLARITY Act that were difficult to accept" suggests that regulatory clarity, even if narrower, might actually be preferable to a legislative compromise that imposes unwanted restrictions.

The broader message from exchange leaders is clear: crypto regulation is coming, but it will be shaped by agency action rather than congressional legislation. This represents a significant shift in how the industry expects to operate, moving from lobbying for favorable laws to building compliance systems that satisfy regulatory expectations. For users and investors, this means that exchange services, custody options, and trading features will continue to evolve based on regulatory guidance rather than a single comprehensive legal framework.