TD Cowen: SEC and CFTC rules more durable than orders, but both lag behind legislation

When Congress can’t get it done, agencies step in. That’s the short version of what just happened in US crypto regulation, and TD Cowen’s Washington Research Group wants investors to understand why the distinction matters more than it might seem. The investment bank’s analyst Jaret Seiberg has been tracking the regulatory fallout after the Senate’s 49-50 procedural vote killed the CLARITY Act on September 15, sending the most ambitious attempt at a durable digital asset framework to the legislative graveyard. Within days, the SEC and CFTC moved independently to fill the vacuum. The problem, as TD Cowen sees it, is that what agencies giveth, agencies can taketh away. What the agencies actually did The SEC moved fast. On September 17-18, the commission granted a five-year conditional “innovation exemption” that lets regulated venues trade tokenized NMS stocks through automated market makers without requiring full exchange or dealer registration. The CFTC matched the pace, broadening its staff no-action relief for passive software providers that help users access regulated derivatives markets. No-action relief is essentially the agency saying “we see what you’re doing and we won’t sue...