Senate negotiations remain stuck over stablecoin rewards and safeguards tied to Trump's crypto interests. The SEC and CFTC are moving under existing authority, while Patrick Witt's departure leaves the White House without its central broker.
The Senate motion to advance the CLARITY Act failed on Sept. 15, 2026. It drew 49 votes in favor and 50 against, falling short of the 60 required. The vote was procedural, not a final decision on passage. The bill's prospects remain uncertain ahead of November's midterm elections.
Patrick Witt's departure leaves the White House without a central intermediary in negotiations over the bill. The White House confirmed to The Block that Witt's temporary detail expired on Oct. 14. His departure became public the next day. Witt had been assigned from the Department of Defense, rather than appointed to a permanent White House post. No successor has been publicly named. Federal regulators, meanwhile, are advancing parts of the administration's agenda under powers they already hold.
Senate impasse
The House approved its version of the CLARITY Act in July 2025. Senate talks have since hit a wall over how to treat stablecoin rewards and whether they could pull deposits away from traditional banks. Banks have warned of deposit outflows. Crypto companies argue that restrictions could limit competition.
Democrats have also pushed for stronger safeguards addressing Trump's financial interests in cryptocurrency ventures. Negotiators remain divided over who would enforce restrictions, with the Justice Department and state authorities both under discussion. The dispute has complicated legislation meant to establish a broad digital-asset framework and clarify the division of responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Witt worked between lawmakers and industry representatives. Days before the failed vote, he warned that missing the chance to advance legislation could delay comprehensive crypto rules for years. Coinbase CEO Brian Armstrong praised Witt's determination and his ability to work with people holding competing interests. Alexander Grieve, a government affairs executive at Paradigm, described Witt's work as spanning legislative detail and negotiation. He also pointed to Witt's role in political strategy.
Witt's departure
Witt confirmed on Oct. 15 that he was leaving the White House Crypto Council, after nearly two years in the administration. He is returning to the private sector. His next employer and role were not disclosed. In his farewell statement, Witt credited the administration's work on cryptocurrency policy and thanked Trump and David Sacks for their leadership.
Witt also cited the GENIUS Act, which established federal rules for payment stablecoins, along with the administration's push to advance the CLARITY Act. His exit followed the departure of former council director Bo Hines in August 2025. David Sacks left in March, and deputy director Harry Jung departed in July. LCX reported that Witt was the council's last remaining staff member.
The dates trace the stalled effort: the House passed its version in July 2025, the Senate motion failed on Sept. 15, 2026, and Witt's temporary assignment ended on Oct. 14. The SEC proposed a cryptocurrency custody framework on Oct. 1. Four days later, the CFTC opened a consultation on certain leveraged retail cryptocurrency commodity transactions.
Agencies advance
The Securities and Exchange Commission and the Commodity Futures Trading Commission are pursuing crypto policy under existing statutory authority, giving them room to act while Congress remains stuck. Under Chairman Paul Atkins, the SEC has pursued rules for cryptocurrency issuance and custody. Its initiatives also include an Innovation Exemption for trading tokenized NMS stock. In August, the agency proposed exemptions covering crypto fundraising.
The SEC's Oct. 1 custody proposal seeks clearer requirements for investment advisers and regulated funds that hold digital assets. It remains a proposal, not an enacted rule, and its terms could change before finalization. The CFTC, led by Chairman Michael Selig, is consulting on rules for certain leveraged retail crypto commodity transactions. The proposal includes a specialized registration framework for crypto trading markets. Selig has said the agency plans to proceed under its current powers without waiting for Congress.
The SEC and CFTC retain powers granted under existing law. The Treasury also has regulatory powers under that law. Agency action can shape policy while the bill is stalled, but it does not settle the legislative questions before the Senate. In his farewell statement, Witt thanked Atkins and Selig for working with him on cryptocurrency legislation over the past year. For U.S. firms and users, agency rules can have different staying power from legislation. Atkins has acknowledged that legislation is essential to create rules future administrations would find harder to reverse.
Agency action draws on authority Congress has already granted, while a new statute can set a broader framework. A proposed rule can change before it is finalized, and its reach depends on the authority Congress gave the agency. Legislation requires agreement across Congress, which the current disputes have not produced.
The European licensing dispute reported in a separate regulatory case involved a German platform and BaFin. That case does not determine how U.S. crypto rules apply. In the United States, the SEC and CFTC are proceeding under existing powers while Congress remains divided over the CLARITY Act.
