SEC and CFTC Move Ahead Without Congress as Treasury Hits Iran-Linked BitBank

Washington's approach to digital assets changed within a single week. After the Senate blocked the CLARITY Act, federal agencies moved quickly to build rules under their existing powers. At the same time, the Treasury Department went after the infrastructure it says Iran uses to move bitcoin. Both moves point to the same conclusion: the U.S. is shaping crypto policy through regulators, not through Congress.

Congress Stalls, Regulators Step In

On Tuesday, the Senate voted 49 to 50 on a procedural motion to advance the Digital Asset Market CLARITY Act. The bill needed 60 votes to end debate and fell well short. The vote was not on final passage, but it halted the industry's most ambitious push for a market structure law ahead of the November midterm elections. Supporters now say the next realistic opportunity may come only in the next Congress.

The agencies that would have shared oversight under the bill did not wait long to respond.

SEC Opens a Five-Year Window for Tokenized Stocks

On Thursday, the Securities and Exchange Commission issued its long-awaited "innovation exemption." The order gives qualifying Tokenized Securities Venues a temporary, conditional exemption from the definition of an exchange, so they can trade tokenized U.S. stocks onchain using permissioned automated market makers and liquidity pools. Liquidity providers using their own capital receive conditional relief from dealer registration.

The relief is deliberately narrow. It runs for five years, does not cover decentralized finance, and excludes synthetic tokens that offer price exposure without real shareholder rights. Issuers can block a venue from tokenizing their shares, and each venue faces limits on the number of stocks and the trading volume it can handle. The SEC also opened a public comment period on how the framework should evolve. Firms that already offer tokenized stocks overseas, and companies such as Coinbase that have signaled U.S. plans, will now be watched closely.

CFTC Sends Its Own Rulebook to the White House

The Commodity Futures Trading Commission acted the same day. It sent a crypto rulemaking package titled "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets" to the White House Office of Information and Regulatory Affairs for review. The agency has not published the details. Press reports suggest a new category of regulated "crypto asset markets" that could bring both registered and currently unregistered exchanges under direct federal supervision.

After the White House review, the CFTC would still need to vote, publish the proposal, and take public comment before any rule becomes final. That process typically takes months.

The CFTC also issued no-action relief for developers of passive trading software, including some wallet interfaces. Qualifying providers that let users view markets and route orders directly to registered firms will not face enforcement for skipping introducing-broker registration. They cannot hold customer assets, generate trading signals, or control order routing.

Treasury Targets the Illicit Side of the Market

While regulators worked on rules for the legitimate market, the Treasury Department's Office of Foreign Assets Control sanctioned BitBank, a Tehran-based exchange. Treasury says the platform is controlled by Iranian financier Babak Zanjani and moved hundreds of millions of dollars in bitcoin to the Islamic Revolutionary Guard Corps between June and July.

Treasury also says the previously sanctioned Hormuz Safe Marine Services Authority has used BitBank since June to pass payments to the regime. That body sells "safe passage" through the Strait of Hormuz, and it reportedly charged tankers $1 million to $2 million per transit. OFAC also designated BitBank's software developer and three Zanjani associates. The action is part of Operation Economic Outcast, the campaign Treasury launched on August 24. Treasury did not publish any wallet addresses. The allegations come from Treasury and have not been tested in court.

What It Means for U.S. Market Participants

The week shows a two-track policy. One track builds regulated pathways for tokenization, trading venues, and software providers. The other tightens enforcement against platforms accused of sanctions evasion. For exchanges, wallets, and payment firms, the practical lesson is that compliance screening and counterparty checks matter more than ever.

There are limits to the new approach. The SEC exemption is temporary, the CFTC package is still at an early stage, and agency rules can be changed by future administrations in ways a statute could not. The industry's push for lasting legislation is far from over.