SEC delays crypto initiatives amid CLARITY Act wait

• Key takeaway: The agency planned to hold an open meeting Friday to consider proposing new rules "to create a tailored offering regime for certain investment contracts involving crypto assets." That meeting was canceled due to an "unforeseen scheduling issue."
• Expert quote: "The SEC is committed to delivering on the president's agenda to bring certainty to the crypto space." — SEC spokesperson
• What's at stake: Some have posited that the postponement of the crypto regulation meeting could be tied to the agency waiting for Congress to pass the CLARITY Act. 

The Securities and Exchange Commission was set to kick off several crypto related initiatives Friday, but the meeting was indefinitely postponed.

The agency planned to hold an open meeting to consider issuing a release proposing new rules "to create a tailored offering regime for certain investment contracts involving crypto assets," according to a public notice published earlier this week. On Thursday, the open meeting was shelved.

An SEC spokesperson attributed the cancellation to an "unforeseen scheduling issue" and said the meeting would be rescheduled "to a later date." No date was provided. 

"The SEC is committed to delivering on the president's agenda to bring certainty to the crypto space," the SEC spokesperson said in a written statement.

According to Bloomberg, the SEC was expected to propose a framework Friday allowing companies to raise capital through token sales without full securities registration. The agency was also expected to propose an "innovation exemption" allowing tokenized stocks to trade on blockchains around the clock.

The SEC did not confirm whether it planned to propose either measure.

In May, SEC Chairman Paul Atkins highlighted the launch of "Project Crypto," a joint effort with the Commodity Futures Trading Commission to modernize rules and regulations and support the migration of financial markets onto blockchain technology.

Atkins outlined several upcoming measures, including an "innovation exemption" for tokenized listed securities and additional guidance on how on-chain trading systems fit within existing regulations.

The SEC's postponement comes after a much-anticipated crypto market structure bill was not brought up for a vote before the Senate's August recess, which began Aug. 6.

The bill was delayed for weeks because of disagreements between Republicans and Democrats over how to enforce its ethics provisions and whether President Donald Trump's Justice Department could effectively police potential conflicts of interest involving the president and the crypto industry.

The CLARITY Act would establish a regulatory framework for the cryptocurrency industry, including clarifying the responsibilities of the SEC and CFTC and creating clearer registration pathways for exchanges and custodians.

A note from TD Cowen analyst Jaret Seiberg suggested the SEC's postponement of the crypto-related rules could be tied to the agency waiting for Congress to pass the CLARITY Act. 

"The delay may extend to October as the SEC does not want this proposal to be used as a reason why Congress fails to enact the Clarity Act on crypto market structure," Seiberg wrote. He also warned that a prolonged delay could cause the SEC's crypto rulemaking to drag on, noting that regulatory proposals can take a year or more to finalize and that the agency may ultimately have to defend its rules in court. 

"The longer the SEC waits to issue the proposal, the greater the risk that the legal process will not conclude prior to the inauguration of a new president on Jan. 20, 2029," wrote Seiberg. "And if the legal process is still ongoing, then it is easier for new SEC leadership to withdraw the plan and issue a new proposal."