Summary Geraci believes SEC and CFTC guidance can advance crypto markets despite congressional gridlock over the Clarity Act and regulatory uncertainty. SEC staff guidance distinguishes routi
Nate Geraci believes the SEC and CFTC can advance crypto rules despite the Senate’s failure to move the Clarity Act forward. According to Geraci, the SEC and CFTC are already guiding the industry while broader legislation remains stalled, giving the United States two years to upgrade its financial system.
Geraci also predicted that politicians who opposed the bill could use stablecoins and trade tokenized stocks by 2028. His prediction reflects confidence in adoption, although the agencies have not set a timetable that guarantees either outcome.
The Senate failed to advance the Clarity Act in a September 15 procedural vote amid disputes over ethics safeguards and stablecoins. The legislation sought broader digital asset rules and a clearer division of responsibilities between federal regulators.
The SEC’s Regulation Crypto Assets proposal provides one example of the agency action supporting Geraci’s argument. Introduced in August, the proposal would create registration exemptions for certain investment contracts involving crypto assets. One exemption would permit offerings of up to $5 million over four years, while another would allow $75 million annually.
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The SEC’s Division of Corporation Finance has also explained how common project activities may affect the treatment of crypto assets. According to its September 25 guidance, a buyback announcement for a token on a functioning network does not alone signal essential managerial efforts.
However, staff drew a different conclusion for unfinished networks whose promoters present buybacks as a potential source of returns. In those circumstances, an announcement could become relevant when regulators assess whether an investment contract exists under the Howey test.
The guidance also addresses development work that projects undertake once their networks are operational. Staff explained that securing, maintaining, and improving a functioning system does not automatically constitute essential managerial efforts. Similarly, describing a network’s existing uses differs from promising future work that buyers might expect to generate profits.
These explanations give projects more detail about how staff views their announcements and routine operations. Nevertheless, the answers represent staff views rather than binding SEC rules, and the circumstances of each case still matter.
Meanwhile, CFTC Chairman Michael Selig has directed staff to update regulations using authority the agency already holds. The CFTC and SEC are working through Project Crypto to clarify token classifications and reduce overlapping requirements.
Their cooperation also covers trading venues, clearing arrangements, collateral rules, and coordinated supervision across the two agencies. Those efforts help explain Geraci’s confidence that regulators can make progress without a congressional agreement.
However, the SEC must still review comments on its offering proposal, which remain open through October 20. Both agencies must also translate their broader plans into specific requirements before companies can rely on them. Geraci’s 2028 prediction remains his assessment, while the agencies’ proposals and guidance offer concrete measures of regulatory progress.
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