Crypto Regulation in Focus as SEC Urges Congress to Pass Market Structure Law

• SEC Chairman Paul Atkins said permanent crypto regulation requires congressional legislation.
• The SEC can issue temporary guidance through Project Crypto, but future administrations can reverse it.
• Senate negotiations on the Digital Asset Market Clarity Act remain stalled over stablecoins, DeFi risks, and oversight concerns.

In a US Senate Banking Committee hearing, SEC Chairman Paul Atkins said permanent crypto policy requires legislation, even though the agency can issue rules on its own.

He said the SEC has broad authority to write regulations through its “Project Crypto” initiative. These rules can give crypto firms immediate clarity. But they can also be reversed by future commission votes because they are not backed by law.

Atkins told lawmakers that lasting policy must come from Congress. Without legislation, any regulatory framework remains temporary and open to change by future administrations.

The SEC is working with the US Senate Banking Committee to support market structure reform. The effort centers on the Digital Asset Market Clarity Act, which aims to create a federal framework for crypto markets and define agency responsibilities.

Related : Gensler Warns of ‘Speculative’ Bitcoin Risks as Atkins Prepares Jan 2026 Crypto Exemption

Senate Negotiations Continue but Challenges Remain

The proposed crypto market structure bill has made limited progress. Lawmakers and industry participants have failed to agree on key issues, including stablecoin reward programs and regulatory oversight details.

Senator Mark Warner, one of the leading Democratic negotiators on the bill, said bipartisan talks are still active, as per a report. He stated that lawmakers want the legislation completed but stressed it must address safety concerns.

Warner raised concerns about decentralized finance and the risk of illegal activity on open financial systems. Negotiations have not yet settled on how to prevent misuse while supporting innovation.

Democratic lawmakers have also questioned staffing levels at regulatory agencies and potential conflicts of interest involving officials with business ties to crypto. These issues remain unresolved.

A similar version of the Clarity Act passed the House of Representatives last year. Another version recently cleared the Senate Agriculture Committee in a party-line vote. For final passage in the Senate, at least seven Democrats must support the bill.

Market Structure Reform and Regulatory Clarity

Senate Banking Committee Chairman Tim Scott said market structure reform is a top priority. The legislation aims to resolve long-standing confusion between the SEC and the Commodity Futures Trading Commission (CFTC) over crypto oversight.

The proposal would define how digital assets are classified and which agency regulates different parts of the market. Lawmakers say clear rules could reduce enforcement disputes and encourage business activity in the United States.

The joint SEC-CFTC “Project Crypto” initiative is designed to act as a bridge toward legislation. The program is working on a token classification system to clarify regulatory obligations for investors and firms.

The US government also views clearer crypto policy as a way to strengthen market security, reduce fraud risk, and support domestic innovation.

Related : SEC Chair Atkins Formalizes ‘Tokenization First’ Policy to Modernize U.S. Capital Markets