Securities and Exchange Commission Chairman Paul Atkins said the regulator will press ahead with its own crypto rulemaking agenda after the Senate failed to advance legislation that would have established a federal framework for digital assets.
The CLARITY Act stalled in the Senate on September 15 when a procedural vote fell short at 49 to 50, leaving the bill unable to reach the 60-vote threshold required for floor consideration. The measure, formally designated H.R. 3633, remains gridlocked as lawmakers have yet to resolve disputes over ethics provisions and stablecoin rules.
Atkins, speaking at the Solana Policy Institute Summit on September 14, laid out a three-part framework the agency is pursuing independently of Congress. In a separate post on X the following day, he thanked those who worked on the legislation, including members of the administration, Congress, investors and innovators, and reiterated that the SEC will act “decisively” within its existing legal authority.
“Their shared belief that America must continue to lead remains essential,” he wrote.
Self-Custody Proposal Takes Center Stage
The most immediate piece of the SEC’s crypto agenda is a proposal Atkins said he has directed staff to draft that would allow investment advisers to self-custody crypto assets under certain conditions. The plan would also examine whether state trust companies can serve as qualified custodians for digital assets held by advisers and regulated funds.
“As to self-custody, yes, because for too many assets a qualified third-party custodian simply does not exist yet,” Atkins said at the summit.
The issue has gained urgency because advisers currently must place client assets with outside qualified custodians, yet for many crypto assets no such custodian exists. The SEC’s broader custody rule rewrite entered White House review in August.
Three Pillars of the SEC Framework
Atkins described the agency’s crypto strategy as resting on three pillars:
| Pillar | Description | Status |
|---|---|---|
| Custody rules | Allow adviser self-custody and state trust companies as custodians | Drafting underway; broader rewrite in White House review |
| Regulation Crypto Assets | Rules for crypto investment contract offerings, including exemptions | Proposed August 18 |
| Transfer-agent rules | Update rules dating to late 1970s/early 1980s for blockchain and electronic recordkeeping | In development |
Note: The custody proposal would cover assets tied to regulated funds as well as adviser-held client assets.
The second pillar, Regulation Crypto Assets, was proposed on August 18 and would create rules for certain crypto investment contract offerings. It includes exemptions allowing companies to raise up to $5 million over four years, or as much as $75 million annually, provided they meet disclosure requirements. The plan also includes a safe harbor from the legal definition of a security for certain investment contracts.
Atkins said a key open question under that framework is determining when a covered investment contract ceases to be one — an issue the CLARITY Act was intended to help resolve.
The third pillar involves modernizing transfer-agent rules, many of which have not been updated since the late 1970s and early 1980s. The update would address electronic communications, recordkeeping, blockchain technology, and how securities are offered and transferred.
Path Forward Without Legislation
The SEC chairman has been consistent in signaling that the agency will not wait for Congress. At the summit, he urged lawmakers to pass the CLARITY Act, noting it could help answer the question of when a crypto investment contract legally ends. But he added that the SEC will continue its own rulemaking regardless of the bill’s fate.
With the Senate vote now behind them, the custody proposal, Regulation Crypto Assets, and the transfer-agent update continue to move forward as separate agency actions. For market participants, the message is clear: regulatory clarity will come from the SEC’s rulemaking process even in the absence of new legislation.
For investment advisers, the self-custody proposal could mark a significant operational shift, potentially eliminating the need to rely on third-party custodians that may not exist for certain assets. For crypto issuers, the proposed exemptions under Regulation Crypto Assets offer a pathway to compliant capital raising. And for the broader industry, the transfer-agent modernization signals that the SEC is preparing its infrastructure for blockchain-based securities.
The timing of Atkins’s remarks — delivered at a Solana-focused policy event and reinforced on X after the Senate vote — underscores the agency’s determination to establish a workable regulatory perimeter for digital assets through its own authority, rather than waiting for a legislative solution that has repeatedly stalled in Congress.
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