Former SEC and CFTC leaders debate Clarity Act’s future after Senate defeat at Avalanche Summit

The Digital Asset Market Clarity Act is, for now, dead in the Senate. But the debate over what comes next is very much alive, and it played out in real time at the Avalanche Summit on September 16 when four former top US financial regulators sat down to hash out the implications.

The CLARITY Act (H.R. 3633) failed its cloture vote on September 15 by a count of 49-50, falling 11 votes short of the 60 needed to advance. For a bill that passed the House 294-134 in 2025 and cleared a Senate committee earlier this year after months of bipartisan negotiation, the procedural death was a gut punch for crypto advocates who thought legislative clarity was finally within reach.

Four regulators, one stage, zero consensus

The panel brought together a genuinely unusual lineup: former CFTC Chairs J. Christopher Giancarlo and Timothy Massad alongside former SEC Commissioners Troy Paredes and Caroline Crenshaw. Journalist Eleanor Terrett moderated the session.

Paredes acknowledged that good faith disagreements can arise about what the law actually means, a concession that sounds obvious but carries weight coming from someone who once helped write the rules.

The CLARITY Act attempted to sort digital assets into two buckets: securities under SEC oversight or commodities under CFTC jurisdiction. Drawing that line has confounded regulators, courts, and market participants for the better part of a decade.

Giancarlo, often referred to as “CryptoDad” for his relatively industry-friendly stance during his CFTC tenure, pointed out that SEC Chairman Paul Atkins and CFTC Chairman Michael Selig still possess the authority to advance cryptocurrency regulations through existing frameworks, even without new legislation on the books.

What the bill’s failure actually means for markets

The bill had included provisions around ethics in digital asset handling, language that was added during the Senate committee process to broaden its appeal. Those negotiations consumed months. The fact that all that work still couldn’t secure 60 Senate votes speaks to how politically fraught crypto legislation remains.

Existing authority as Plan B

Giancarlo’s emphasis on Atkins and Selig’s existing powers suggested a possible path forward that bypasses Congress entirely. The SEC has historically used interpretive guidance, no-action letters, and rulemaking under existing statutes to address emerging asset classes. The CFTC has done the same.

The risk with that approach is durability. Administrative guidance can be reversed by subsequent leadership. A law passed by Congress carries far more permanence.

Massad and Crenshaw added nuance to the discussion about what interagency cooperation might look like. Paredes’ acknowledgment that reasonable people can disagree about what the law means is, paradoxically, both the problem and the starting point for any solution.