Crypto Regulation Shifts to SEC and OCC After CLARITY Act Stalls

Regulators now write the rules

One month after the Senate refused to take up the crypto market structure bill, US digital asset policy is coming from regulators instead of Congress. Over the past several weeks the Securities and Exchange Commission proposed a custody framework, the Office of the Comptroller of the Currency kept granting federal trust charters to crypto firms, and FinCEN withdrew two surveillance-era proposals. The open question for crypto companies is no longer whether a federal framework will arrive. It is whether agency rules can hold up without a statute behind them.

My reading is that the industry got much of what it wanted in practice and lost the one thing only Congress can provide: durability. For custody banks, exchanges and bitcoin treasury companies, that tradeoff will shape the next two years.

How the CLARITY Act failed

On September 15, 2026, a cloture motion on the Digital Asset Market Clarity Act (H.R. 3633) failed 49 to 50, short of the 60 votes needed to open floor debate.2623 Reports of the margin differ slightly. One account puts the bill ten votes short and another eleven. The arithmetic supports eleven.2123 The procedural details match across reports. No Democrat voted yes. Republicans Susan Collins, Josh Hawley and Jerry Moran voted no, and Thom Tillis switched his vote to no so he could enter a motion to reconsider.2326

The reporting also agrees that the dispute was mostly not about the bill's core design. The main obstacles were ethics language covering officials' crypto income and limits on stablecoin yield.24 Democrats wanted stronger rules to stop federal officials and their families from profiting from the industry. Sen. Ruben Gallego, who led the Democratic ethics talks, said he would not back legislation that enabled the president's crypto profits.26 One analysis cites roughly $1.4 billion in crypto-related earnings disclosed by President Trump, including licensing income from the TRUMP memecoin and World Liberty Financial.23 On yield, banks argued that rewards-bearing stablecoins could pull deposits away from community lenders. Moran had written about that risk for Kansas farms.26

That matters for reading the outcome. The House passed the bill 294 to 134 in July 2025, so a split between the SEC and the CFTC already had majority support in one chamber.3023 The bill failed over politics attached to it, not over its structure. Most analysts call it shelved rather than dead. Tillis's motion keeps it technically alive, but the midterm calendar makes passage this Congress unlikely.2426 American Banker expects lawmakers to start over next Congress, possibly with Democrats controlling one or both chambers. Banks could then get a more sympathetic hearing on yield, though some provisions that favor banks could become harder to pass.26

Markets reacted immediately. Bitcoin slipped to around $76,000, and Coinbase shares fell more than 8%.2329 House Financial Services Chairman French Hill has since credited the SEC and CFTC for stepping in, while arguing that their actions are no substitute for a statute.22

Custody is now the main battleground

The biggest practical development since the vote is the SEC's October 1 custody proposal. It would give registered investment advisers and regulated funds a tailored framework for holding crypto assets.41 It opens two new routes. State-chartered trust companies could act as custodians, and advisers could hold client crypto themselves under limited conditions.4142

The self-custody route is narrower than some headlines suggest. An adviser could use it only after concluding in writing that no qualified custodian will hold a given asset, and must repeat that review every quarter. Cost is not an acceptable reason.45 Other conditions include two-person approval of transfers, annual cybersecurity reviews and quarterly client statements.42 The SEC also looked at letting assets sit on trading platforms that are not permitted custodians and chose not to propose it.44 The rule was published in the Federal Register on October 6, and comments are due by December 7.48

The effect is to reward firms that already hold regulated custody status, and that is where the OCC comes in. Since late 2025 the agency has given conditional approval for national trust bank charters to a series of crypto firms. In December came BitGo, Circle, Ripple, Paxos and Fidelity Digital Assets, followed by Crypto.com in February.3234 Coinbase received conditional approval on April 2 for Coinbase National Trust Company. It plans to move its institutional custody business there from its New York trust company over three years.3137 The charter would let Coinbase hold client assets but not take deposits or make loans.38 Block applied in September for a charter for Builders Bank and Trust, focused on bitcoin and stablecoin custody, and Modern Treasury has filed for stablecoin custody as well.3640

Conditional approval is not the same as operating, though. As of March, Anchorage Digital was the only firm to have gone from conditional approval to a fully operating national trust bank.39 That shortlist matters more now that the SEC proposal raises the value of qualified custodian status.

Community banks sue the OCC

The charter wave now faces a court challenge. On October 2, the Independent Community Bankers of America sued the OCC in federal court in Washington, D.C. The group targets the agency's March 2 final rule and Interpretive Letter 1176, arguing that the OCC lacks authority to charter trust banks that do substantial non-fiduciary business.35 The trade group argues that these charters let crypto firms enter the banking system without FDIC insurance, consolidated supervision or Community Reinvestment Act obligations.35

The OCC has said its rule change only made the regulatory text match the statute, and that it never read the old wording as limiting trust banks to fiduciary work.39 In approving Coinbase's charter, the agency said critics' objections were really about the framework Congress created, not grounds to deny the application.37 The lawsuit shows the weakness of building policy through agencies. A rule adopted by one administration can be undone by a court or by the next administration. That is the durability Hill says legislation would provide.22

The same pattern shows up in market structure. The SEC proposed Regulation Crypto Assets in August, with offering exemptions and a conditional safe harbor. Its comment period closes October 20.1124 The CFTC has sent its own crypto rulemaking to the White House for review, but Orrick cautions that binding rules may still be more than a year away. Agency rules also cannot provide the broad state-law preemption that CLARITY would have.24 Without that preemption, unleveraged spot trading and custody stay under a patchwork of state money transmitter and licensing regimes.24

Not every development since the vote has added rules. On October 6, FinCEN formally withdrew a proposal to track transfers to and from self-custody wallets and another targeting crypto mixing.19

Bitcoin treasury companies: markets bite harder than regulators

For bitcoin treasury companies, the stalled bill matters less than their own share prices. The model depends on mNAV, the ratio of a company's market value to its crypto holdings. When mNAV is above 1, issuing stock to buy bitcoin increases bitcoin per share. When it falls below 1, the same move dilutes existing shareholders.3 By June, most of the sector had lost that premium.31

The numbers depend on how mNAV is calculated. On an enterprise-value basis, Strategy showed an mNAV of 1.13 on September 24, even though its market capitalization of about $61.8 billion was below the roughly $71.2 billion value of its 846,000 BTC.2 Other trackers said its enterprise mNAV fell below 1 in June, and one glossary says it dropped under 1.0 in mid-2026.710 Readers should check which definition a figure uses before comparing them. What the reporting agrees on is the direction. Twenty One (0.73), Metaplanet (0.78) and Nakamoto (0.90) traded below 1 in late September.2 One estimate put about a quarter of treasury companies below that line in July.7

Companies have responded in different ways. Strategy authorized up to $1.25 billion in bitcoin sales to fund dividends, interest and buybacks, and raised the dividend on its STRC preferred stock to 12%.2 MARA sold 15,133 BTC to buy back convertible notes. Riot sold coins while moving into AI data centers.1 These companies' main constraint is fixed cash costs such as preferred dividends and debt interest, which they must pay regardless of bitcoin's price.4

The custody rules may still help them indirectly. If advisers and funds get clear rules for holding crypto directly, more investors can own bitcoin without going through a treasury company's stock. Some analysts already describe the proposal as widening institutional access beyond ETFs.50 That is a reasonable inference, not a proven result. But it suggests the premium these companies once earned as one of the few routes to bitcoin exposure may not return.

What to watch

In the near term, watch for final OCC charter approvals, the outcome of the community bank lawsuit, and comments on the SEC custody proposal before the December 7 deadline. Longer term, the industry is relying on rules that the next Congress or the next administration could change. For now, the regulators are making US crypto policy.