US Midterms: Agencies, Not Congress, May Drive Crypto Rules

Whatever the midterm result, US crypto rules are likely to keep arriving through agency guidance rather than statute, and that is a direct planning problem for any team relying on crypto accounting software. A senior lawyer at 1inch says the real movement will come from the SEC, the CFTC and Treasury, while the CLARITY Act remains stalled. Finance teams should assume rules that can change, and build their processes accordingly.

What the 1inch lawyer actually said

As voting got underway in the US midterm elections, with control of Congress at stake, Maylea Ma, deputy general counsel at 1inch, offered a view that cuts against the usual election-night narrative. The outcome could reshape the path for the stalled CLARITY Act, she said, but the "real movement" in US digital-asset regulation over the next few years is expected to come from agencies: the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Treasury.

Ma also noted that these agencies are engaging more with crypto projects. That is a meaningful shift in tone for an industry that spent years complaining about enforcement without a clear rulebook. But engagement is not the same as certainty. In her words, the long-term goal is still a statute that cannot be reversed every time a government changes.

Why agency guidance is a weaker foundation than statute

Michael Ho, co-founder of D3, the team behind Doma Protocol, made the investor-side argument. With the market structure bill stalled, he said, US crypto policy rests on agency guidance that a future administration can reverse, and that keeps serious capital waiting. His view is that rules written into law are what will bring institutional capital into tokenized real-world assets.

For accountants, the point is not political. It is structural. Guidance, exemptions and safe harbors are real and usable today, but they carry a shelf life that statute does not. Any accounting policy, disclosure or control that leans on them inherits that fragility.

Where US crypto policy stands right now

The source lays out a short timeline of recent agency action. It is worth separating what has been done from what remains unresolved, because the two require different responses from a finance function.

Recent agency moves cited in the report

In August, the SEC acted on token offerings, including exemptions for certain token offerings and a safe harbor from treatment as investment contracts. In September, it also moved on a further set of topics covering token buybacks, crypto networks and staking receipt tokens. The CFTC, for its part, took action on Sept. 17, two days after the Senate failed to advance the CLARITY Act.

The report does not detail the full text of these measures, and neither do we here. What matters for planning is the pattern: while Congress stalled, agencies kept producing usable, if reversible, positions.

What remains unresolved

The CLARITY Act is stalled. The election could change its prospects, but nothing in the source says it will pass, or when. Until a statute exists, the durable allocation of authority between the SEC and the CFTC, and the treatment of specific token categories, stays dependent on agency positions. That is the gap Ma and Ho both point to.

It also helps to be clear about what the source does not say. It does not describe new tax reporting rules, new accounting standards, or new AML obligations. Its subject is who is likely to write the rules and how durable they will be. The accounting, tax and AML consequences below are our analysis of that backdrop, not provisions in the report.

What this means for accounting firms, auditors and CFOs

If you run or advise a crypto-active business, the practical question is how to keep financial reporting defensible when the regulatory ground can shift between administrations. Several areas deserve attention.

Classification and policy documentation

Safe harbors and exemptions around token offerings and investment-contract treatment can influence how a firm describes its holdings, its revenue and its risk. If your internal policy relies on an agency position, record it: which guidance, which date, which token or activity it covers, and who signed off. When the position changes, you can show exactly what your treatment rested on and when you reassessed it. Auditors will want that trail, and a reversal without documentation is hard to defend.

Staking receipt tokens, token buybacks and network-level activity are specific areas the SEC addressed in September. Teams with exposure to any of these should review how they recognise, measure and disclose them, and note whether their treatment depends on an agency view that could be withdrawn. Accounting standards themselves are set elsewhere and have not changed in this story, so the point is not new recognition rules. It is that the legal characterisation of an asset can feed judgements about disclosure, risk and, in some cases, how a counterparty relationship is assessed.

Why systems matter more when rules are reversible

When rules are stable, a one-off manual treatment can survive for years. When rules can be reversed, you need the ability to re-run history under a different assumption. That is where well-configured crypto accounting software earns its place: consistent transaction capture, a clear audit trail from wallet or exchange record to ledger entry, and the flexibility to reclassify at the asset or activity level without rebuilding the books.

For many mid-sized teams, the real work is less about the label on the tool and more about discipline. Whether you call it crypto bookkeeping software or digital asset accounting software, the questions are the same. Can it version your policy settings? Can you see which entries depended on a given classification? Can you report on affected balances quickly if guidance moves? Build those answers into your selection and your month-end close.

Disclosure, risk and the capital-markets link

Ho's comment that uncertainty keeps serious capital waiting has a direct accounting corollary. Institutions allocating to tokenized real-world assets will ask diligence questions about regulatory durability. A CFO who can show a documented policy, a change log and a clear view of exposure to reversible guidance gives investors something concrete. A CFO who cannot is more likely to field awkward questions during a raise or an audit.

It is also a good reason to keep management commentary precise. Describe regulatory dependence as it is: reliance on current agency positions that may change. Avoid language that implies permanence the law does not currently provide.

Tax and AML implications to keep on the radar

The source is about market structure, not tax or AML rules, so it would be wrong to claim new obligations flow from it. But the same agency-led pattern shapes how you should prepare in both areas.

Tax: agency positions do not settle tax treatment

A securities or commodities characterisation by the SEC or CFTC is not the same as a tax characterisation. For US filers and the firms that serve them, tax treatment depends on tax authority rules and guidance. The Treasury is named in the report as one of the agencies expected to matter, and Treasury sits over tax administration as well as other functions. The source does not say what Treasury will do on tax, so do not assume a change. What you can do is keep your tax lot records, cost basis methods and valuation sources clean, so that whichever way characterisation develops, your reporting can follow without a rebuild.

For advisers, a useful habit is to separate three layers in client files: the regulatory characterisation, the accounting treatment, and the tax treatment. Changes in one do not automatically change the others, and mixing them is a common source of errors.

AML: supervision is moving toward agencies and Treasury

Treasury's expected role is also relevant to AML and sanctions compliance, where its functions are significant. Again, the report does not announce a rule. But if agencies and Treasury carry the policy load, expect compliance expectations to be communicated through guidance, advisories and enforcement priorities, all of which can move quickly. Teams should keep wallet screening, counterparty due diligence and source-of-funds records current and exportable.

That agency-first posture is visible in recent coverage on our site. See the CFTC chair's case for US oversight of offshore exchanges and our look at how the Binance hack pushed CFTC and Congress to act. Both show agencies positioning themselves to lead where legislation has not arrived.

Practical next steps for finance teams

None of this calls for panic. It calls for a short list of habits that make a reversible rulebook manageable. Our wider crypto compliance reporting hub covers the reporting side in more depth.

A short checklist

• Inventory every accounting, disclosure and control decision that relies on an agency exemption, safe harbor or guidance position, and record the source and date.
• Flag exposure to the areas the SEC addressed: certain token offerings, token buybacks, crypto networks and staking receipt tokens.
• Set a review trigger: reassess these positions when an agency changes guidance, when an administration changes, or when the CLARITY Act moves.
• Confirm your crypto accounting software can reclassify at asset or activity level, keep a change log, and report affected balances on demand.
• Keep tax, accounting and regulatory characterisations documented as separate layers.
• Refresh AML screening and counterparty records so they are export-ready for auditors, banks and examiners.

What to tell the board and the audit committee

Give leadership a plain summary: policy is currently being shaped by agencies, those positions can be reversed, the legislative route is stalled, and the company has a documented process for monitoring and responding. That framing is accurate, avoids over-claiming, and positions the finance function as the owner of regulatory-change risk rather than a bystander to it.

If the election shifts the odds for the CLARITY Act, revisit the plan. If it does not, the plan still holds, because it never depended on a particular outcome.

FAQ

Who is expected to drive US crypto regulation after the midterms?

According to Maylea Ma of 1inch, the SEC, the CFTC and Treasury are expected to drive real movement over the next few years, rather than Congress, regardless of the election result.

Is the CLARITY Act dead?

The source describes it as stalled after the Senate failed to advance it. The election could reshape its path, but the report does not say whether or when it will pass.

Why does agency guidance create accounting risk?

Guidance, exemptions and safe harbors can be reversed by a future administration. Any policy or disclosure that depends on them can need revisiting, so documentation and the ability to re-run treatment matter.

Does this change tax reporting for crypto?

The source does not announce any tax reporting change. Regulatory characterisation by the SEC or CFTC is also distinct from tax treatment, so keep those layers separate and your cost basis and valuation records clean.

What should crypto accounting software be able to do in this environment?

It should capture transactions consistently, keep an audit trail from source record to ledger, let you reclassify by asset or activity, log policy changes, and report on affected balances quickly if guidance moves.

Source: Cointelegraph Regulation