In Law360 Article, Helen Gugel and Patrick O'Connell Analyze What Comes Next for Digital Asset Regulation After the Clarity Act's Senate Defeat

In a new article in Law360, litigation & enforcement partner and co-leader of the digital assets, crypto and blockchain task force Helen Gugel and litigation & enforcement associate Patrick O'Connell examine the implications of the U.S. Senate's September 15 vote to block the Digital Asset Market Clarity Act and what the bill's failure means for the regulatory landscape ahead of the November midterm elections.

The article analyzes why the bill stalled—including disputes over ethics provisions for government officials holding digital assets, concerns from community banks about stablecoin deposit competition, and pushback from a bipartisan group of 18 state attorneys general—and assesses the pathways that could deliver regulatory clarity in the absence of legislation. Among the near-term developments they highlight are SEC-proposed rules for token-based capital raises and CFTC Chairman Michael Selig's stated intent to codify digital asset rules through the agency's existing authority.

As Helen and Patrick note, the Senate's rejection "is not a rejection of digital assets" but rather reflects the reality that "the legal frameworks for digital asset regulation will come through other avenues." They counsel companies in the digital asset space to anticipate formal agency rulemaking and to continue monitoring the evolving patchwork of agency guidance that governs the market today.