SEC and CFTC Issue Crypto Guidance Following CLARITY Act Failure

Following the U.S. Senate's failure to pass the CLARITY Act, the SEC and CFTC have issued new policy guidance for digital assets. The SEC's updated compliance FAQ clarifies that tokens on functional, decentralized networks may not necessarily be classified as securities under the Howey test, specifically regarding buyback arrangements and staking receipts. SEC Chair Paul Atkins and CFTC Chair Michael Selig indicated that both agencies will continue to establish a regulatory framework for the crypto market despite the lack of congressional legislation.