Crypto Regulation Shakeup: Market Structure Stalls as Power Shifts From Congress to Regulators

Washington's crypto stalemate just hit a wall—and the real action's moving elsewhere.

The Regulatory Power Grab

Forget waiting on Congress. While lawmakers debate, agencies like the SEC and CFTC are writing the rulebook through enforcement and guidance. It's a classic D.C. pivot: when legislation stalls, regulators fill the vacuum. The result? A patchwork of rulings that's creating more uncertainty than clarity for builders.

Market Structure in Limbo

The grand plans for a unified U.S. digital asset market framework? Officially stuck. The delay leaves exchanges and projects navigating a maze of conflicting state and federal demands. Innovation doesn't pause for bureaucracy, so development is sprinting ahead of the law—again.

What This Means for Your Portfolio

Short-term volatility? Almost guaranteed. Every new regulatory action sends shockwaves through prices. But long-term? Clear rules—even aggressive ones—beat legislative purgatory. The market craves predictability more than it fears scrutiny. This shift might just force the clarity that years of congressional hearings couldn't deliver.

The finance world's oldest playbook is in motion: when you can't win the vote, you write the rules. Crypto is just learning what Wall Street has known for a century.

The language WOULD exempt certain blockchain software developers from financial licensing requirements, a move lawmakers warned could weaken law enforcement’s ability to pursue money laundering and other illicit financial activity.

In a private letter first reported by Politico, Grassley and Durbin argued that the provision falls squarely under the Judiciary Committee’s jurisdiction and noted that their panel was not consulted before the markup was scheduled and later postponed.

The section closely mirrors the Blockchain Regulatory Certainty Act, a bipartisan proposal led by Senators Cynthia Lummis and RON Wyden, but its inclusion has now become another flashpoint in an already fragile legislative process.

Market Structure Bill Slips Further Down the Agenda

Momentum behind the broader market structure bill continues to slow. According to reports, the Senate Banking Committee has again delayed work on the legislation, pushing consideration to late February or March. Instead, lawmakers are shifting focus to housing legislation following President Donald Trump’s renewed push on affordability.

Crypto market structure bill – Clarity Act – has been further delayed by the US Senate Banking Committee until late February or March.#CryptoMarketStructureBill #ClarityAct #CryptoRegulationhttps://t.co/sfk07tyygY

The delay reinforces a growing concern within the crypto industry: despite years of debate, market structure reform remains vulnerable to political reprioritization. What was once positioned as urgent now risks being sidelined by competing legislative priorities.

Partisan Cracks Begin to Show

While the Banking Committee hesitates, the Senate Agriculture Committee is moving ahead, even without Democratic support. Chair John Boozman has scheduled a markup for January 27, acknowledging that “differences remain on fundamental policy issues” but signaling a willingness to proceed regardless.

Senate Agriculture Committee advances crypto bill for January 27 markup without Democratic support as Banking delays CLARITY Act over stablecoin disputes.#ClarityAct #Stablecoinhttps://t.co/Wjz1vpYh5d

If passed, the MOVE would mark a shift away from bipartisan consensus toward a more partisan approach, raising questions about the long-term durability of any resulting framework in a divided Congress.

Regulators Step In as Lawmakers Stall

As Congress struggles, regulators are increasingly filling the gap. Newly appointed CFTC Chair Michael Selig this week declared the start of a “golden age” for U.S. financial markets, launching a “Future-Proof” initiative intended to update decades-old rules to reflect crypto, blockchain, and artificial intelligence.

@CFTC Chair @MichaelSelig launches "Future-Proof" initiative to modernize derivatives rules, calling it America’s “GOLDEN AGE” for markets. #CFTC #MichaelSelig https://t.co/LMwHJ6NJLi

At the WHITE House, Digital Asset Advisor Patrick Witt added pressure from another angle, urging swift passage of a market structure bill. Pushing back against claims that “no bill is better than a bad bill,” Witt warned that failure to act now could invite far more punitive legislation under a future Democratic Congress, particularly in the aftermath of a market crisis.

Enforcement Pulls Back—Coordination Moves Forward

Meanwhile, enforcement trends continue to shift. A Cornerstone Research report found that SEC crypto enforcement actions fell 60% in 2025 following Paul Atkins’ appointment as chair, indicating a move away from regulation by enforcement and toward a more targeted focus on fraud.

The SEC opened just 13 crypto enforcement cases in 2025, down 60% from 2024, with most new actions under Chair Paul Atkins focused on fraud.#SEC #CryptoEnforcement https://t.co/YI5S1uVisH

That recalibration was reinforced this week as Atkins and Selig announced a joint event aimed at regulatory harmonization between the SEC and CFTC, a symbolic but meaningful step toward reducing the jurisdictional confusion that has long plagued U.S. crypto markets.

The Bigger Picture

Taken together, this week’s developments point to a clear pattern: legislative paralysis is pushing more responsibility onto regulators. Whether that results in clarity or further fragmentation will depend on whether coordination can replace congressional gridlock—and whether lawmakers can still reclaim leadership before agencies set the rules by default.