Crypto for Advisors: Wall Street is done waiting on Congress for crypto rules
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
With the U.S. Senate failing to advance the CLARITY Act, leaving no comprehensive federal digital asset framework, Wall Street financial firms are independently developing compliance and infrastructure standards for crypto assets. After the SEC issued a temporary "innovation exemption" for onchain trading of tokenized U.S.-listed stocks, firms face uncertainty since exemptions may be narrowed or withdrawn. Industry players like OKX and Uphold highlight the complexity and cost of navigating inconsistent federal and state regulations, leading firms to build tailored and often siloed private networks for tokenized assets rather than shared infrastructure. Continuous compliance and separation of trading, custody, and clearing functions are emerging as standard industry practices even without congressional legislation.
Why it matters
The source suggests this industry-driven standardization matters because it sets a de facto framework for crypto operations that future laws will likely have to acknowledge. Advisors should focus on these evolving practices rather than legislative developments, as compliance challenges constitute a major operational cost. The direction of building distinct control layers for functions like custody and trading could enhance security and reduce single points of failure, impacting investor protections and market structure. However, the source does not explicitly elaborate on broader market or policy implications beyond these operational aspects.
Key context
The Senate failed to advance the CLARITY Act on September 15, 2026, leaving a federal regulatory vacuum for digital assets. Two days later, the SEC granted an innovation exemption permitting some venues to trade tokenized U.S.-listed stocks onchain, but without statutory permanence. Firms must comply with varying federal statutes, agency regulations, state laws, and regulators, each moving at different speeds. Early crypto companies combined trading, custody, and clearing, but current trends favor separating these functions among different entities to mitigate risk. Compliance has become a significant cost center, requiring bespoke solutions for different jurisdictions.
Key numbers and entities
Federal actors include the U.S. Senate and the SEC. Financial firms and people mentioned are Adam Schumann (VP of legal, OKX), Aravind Raju (CFO, Uphold), Lewis Tuff (CEO, Twilight), and Eric Soufer (partner and head of advanced tech, Tusk Strategies). The key legislative bill referenced is the CLARITY Act. No specific financial figures or market data are provided.
What remains unclear
The source does not clarify whether the emerging industry standards will fully replace the need for federal legislation or merely serve as interim solutions. It is also unclear how long the SEC's innovation exemptions will remain in effect or how they might be altered. The impacts of fragmented private networks and the industry’s approach to interoperability risks remain speculative. Finally, the longer-term implications for investor protection and regulatory enforcement, beyond operational costs and compliance practices, are not detailed.