The SEC and CFTC issued crypto exemptions within hours of each other on Thursday, marking the first concrete use of existing authorities both chairmen invoked after the Senate declined to take up a market structure bill.
The Securities and Exchange Commission granted temporary, conditional relief from the definition of "exchange" to a new category called a Tokenized Securities Venue (TSV), allowing tokenized National Market System (NMS) stock to trade onchain through permissioned liquidity pools. The Commodity Futures Trading Commission issued a no-action position through its Market Participants Division, telling passive software providers they need not register as introducing brokers.
Neither instrument came from Congress, and neither is permanent. The SEC order expires five years after publication and the Commission can amend or withdraw it before then; a staff no-action position binds only the division that wrote it. The Senate rejected cloture on the motion to proceed to H.R. 3633 by 49-50 on Tuesday, 11 votes short of the 60 required.
"Congress was unsuccessful in advancing the CLARITY Act despite the tireless efforts of many," SEC Chairman Paul Atkins said in a statement accompanying the order. The Commission is "taking a significant step forward, within its statutory authority, to bring America's capital markets into the digital age," he said, adding that "this interim measure must be followed by durable rulemaking to ensure that onchain markets remain a viable pathway."
The order, Release No. 34-106402, exempts venues from the exchange definition in Section 3(a)(1) of the Securities Exchange Act and exempts certain liquidity providers from the dealer definition in Section 3(a)(5). It grants no relief from antifraud provisions, Office of Foreign Assets Control sanctions compliance, or Securities Act registration for primary offerings, and it permits no primary issuance.
