The crypto industry lost its two most prominent Washington advocates on the same Friday, ten days after the Senate killed the market structure bill they had spent years pursuing. Neither departure announcement mentioned the Clarity Act. That silence is the tell.
Last week, this newsletter covered the Senate's failure to advance the Digital Asset Market Clarity Act. This week, the aftermath: exits, guidance, and the unsteady machinery filling the gap.
Start with the contradiction. SEC Commissioner Hester Peirce, the agency's steadiest crypto voice since 2018, posted her resignation letter on September 25. Her last day is October 2. The same day, the SEC's Corporate Finance staff published a new Q&A clarifying when liquid staking tokens, token buybacks, and protocol marketing might trigger investment-contract analysis.
The agency is producing more crypto-specific guidance than at any point in its history, even as the commissioner most associated with that project walks out the door.
The agency is producing more crypto-specific guidance than at any point in its history, even as the commissioner most associated with that project walks out the door.
Peirce will leave the commission with just two members: Chairman Paul Atkins and Republican appointee Mark Uyeda. The agency's rules allow two members to constitute a quorum when shorthanded. Trump's White House has declined to name Democratic nominees to the SEC or the CFTC. It is unclear whether he will fill the vacancies now.
What Peirce leaves behind is substantial but fragile. She ran the SEC's Crypto Task Force before Atkins arrived. Her work included policy statements on mining, staking, memecoins, and a series of definitions classifying crypto assets by regulator. The agency proposed Regulation Crypto Assets, establishing a system for offering crypto assets without triggering stringent securities regulations. Its biggest splash was opening a pathway for tokenizing securities through a five-year "innovation exemption."
In her final weeks, Peirce used her platform differently. At SIFMA's Digital Assets Conference, she called the KYC/AML regime a "panopticon" built on a flawed premise. "We build ever bigger data haystacks on the theory that we will find a needle or two inside," she said. "The bigger haystack, however, makes it harder to find the needles."
She pitched zero-knowledge proofs and attribute-based credentials as replacements for bulk data collection. The timing was pointed. Revolut had recently exposed customers' passports and full Bitcoin transaction histories after a fraudulent government data request. Trezor suffered vendor breaches exposing tens of thousands of customers. Peirce warned against "data maximalists" who assume more collection is always better.
That argument now belongs to a departing commissioner with no obvious successor to carry it.
The guidance machinery, meanwhile, keeps running. The new SEC staff Q&A addresses questions the industry has pressed for years. Staking receipt tokens evidencing ownership of a digital commodity may qualify as a "digital instrument" under certain conditions. Liquid staking provider tokens may be treated as digital commodities when linked to programmatic activity of a functional system.
On buybacks, staff said announcing a buyback program for a non-security token in an already functioning system would not, by itself, constitute "essential managerial efforts." That assessment shifts when the protocol is not yet functional or when a team markets buybacks as profit mechanisms.
The Q&A builds on the SEC's March 2026 interpretive framework: crypto assets may not be securities on their own, but can be part of an investment contract depending on how they are sold and marketed. Routine actions like securing, maintaining, and developing an established system generally do not amount to essential governance efforts.
This is granular, useful guidance. It is also staff guidance, not formal rulemaking. The distinction matters.
Skadden's analysis of Regulation Crypto Assets flags a structural vulnerability. The proposed safe harbor would apply after an issuer completes or permanently stops the essential managerial work it promised, is not making new promises, and files a transition report certifying those conditions were met.
But the proposal expressly preserves private parties' ability to argue that a crypto asset remains tied to an investment contract after a transition report is filed. Purchasers could bring suit alleging unregistered securities sales under Section 12(a)(1). Plaintiffs could also bring Rule 10b-5 claims alleging materially misleading statements in disclosure documents or the transition report itself.
The transition report could strengthen an issuer's defense. It could also serve as evidence framing challenges about whether the issuer's analysis matched its actual conduct. What constitutes essential managerial efforts is a fact-intensive inquiry. It remains to be seen how such claims would play out.
So the guidance reduces some uncertainty while creating new compliance sensitivity. The safe harbor meant to provide clarity may become a litigation roadmap.
The trade group churn compounds the instability. Blockchain Association CEO Summer Mersinger announced her departure on the same Friday as Peirce. She steps down October 16 and will remain as an advisor through year-end. Kristin Smith, the association's original CEO who ran it from 2018 until fifteen months ago, returns as interim CEO on October 17.
Smith left the Blockchain Association last year to become president of the Solana Policy Institute. She retained the BA board presidency. She will keep her SPI job while running the association, per a spokesman.
Mersinger took the CEO role in June 2025 after leaving the CFTC. She led the group through the GENIUS Act, the stablecoin law Trump signed in July 2025, and through what the association called "unprecedented crypto activity" at the SEC and CFTC. "I came here from the CFTC because I believed this industry deserved clear rules of the road and a credible, unified voice making the case for them in Washington," she said.
That voice is now interim. The association that spent years building relationships on Capitol Hill is being run by someone with another full-time job.
The exits came ten days after the Senate blocked the Clarity Act, with all Democrats and some Republicans declining to support it. Neither Mersinger nor Peirce mentioned the bill in their statements. The industry's legislative strategy failed, and its two most recognizable Washington figures are leaving. The connection is not stated. It does not need to be.
Elsewhere in the ecosystem, the CFTC updated its crypto FAQs on September 24, clarifying how regulated firms can use tokenized assets for customer funds and blockchain for recordkeeping. Chairman Michael Selig said staff updated the FAQs "consistent with the agency's ongoing efforts to provide regulatory clarity for the crypto industry."
Tokenized real-world assets reached $46 billion in market capitalization as of September 24, per Token Terminal. Funds made up $34.7 billion, or 75.5% of the total. Commodities followed at $7.7 billion. Tokenized stocks accounted for $3.5 billion.
The numbers show where the market sits while regulators work through how blockchain-based assets fit existing rules. The CFTC guidance follows Staff Letter 25-39 on tokenized collateral and Staff Letter 26-05 providing a no-action position for digital assets accepted as margin collateral.
Coin Center, meanwhile, argued in a new brief that DOJ enforcement discretion cannot replace clear legal protection for non-custodial developers. "A thin DOJ policy memo is no substitute for legal protection," the group posted. That is the same tension running through everything else: guidance, memos, and FAQs accumulating while formal rules remain unfinished.
Circle added its own churn. CFO Jeremy Fox-Geen will step down by end of December after more than five years including the company's $1.2 billion IPO. Co-founder P. Sean Neville resigned from the board effective immediately for personal reasons.
The pattern is consistent. The people who built crypto's Washington presence are leaving. The guidance they leave behind is real but incomplete. Staff documents can be revised or rescinded. Safe harbors can become litigation exhibits. Interim CEOs have other jobs.
Peirce's resignation letter described maximizing freedom within "sensible regulatory parameters" as a "delicate and vitally important task for the regulator." She also noted the agency had "hindered innovation and growth" during the enforcement era. "The only guidance out of the SEC is a parade of enforcement actions and a set of staff guidance documents and staff no-action letters," she said then, criticizing the approach.
Now the agency is producing staff guidance documents at an accelerating pace. The commissioner who spent years demanding formal rules is leaving while that guidance flows. The SEC will have two members. The Blockchain Association will have an interim CEO who is also running another organization. The Clarity Act is dead.
The post-CLARITY vacuum is being filled by exactly the unstable mix Peirce once criticized: staff guidance and personnel churn. It is not nothing. But it is not rules.