Financial firms are building their own compliance systems and digital-asset infrastructure after the Senate failed to advance the CLARITY Act on Sept. Four Republicans joined all Democrats in opposing the measure, which had faced demands for stronger restrictions on President Donald Trump’s crypto interests.
The vote left regulators to address parts of the policy gap. Two days later, the Securities and Exchange Commission granted temporary, conditional relief to Tokenized Securities Venues, allowing permissioned trading of certain tokenized National Market System stocks through automated market makers and liquidity pools. The exemption limits symbols and trading volume, requires tokenized stocks to provide holders the same rights as equivalent traditional shares, and requires public, auditable smart contracts. It is set to expire five years after publication, while the commission seeks public comment on possible changes.
At a financial-services event in New York, executives described how firms are operating across overlapping federal and state requirements. Adam Schumann, OKX’s vice president of legal, said companies must navigate federal statutes, federal agencies, state laws and state regulators that do not move at the same pace. Aravind Raju, Uphold’s chief financial officer, said compliance has become one of the company’s largest departments because it develops solutions tailored to individual states.
Institutions are also creating private networks for tokenized assets, stablecoins and securities ledgers, but those systems often cannot communicate easily. At the same time, trading, custody and clearing are becoming more separated, with traditional custodians holding digital assets while other venues execute trades. Compliance and security checks are also moving toward continuous transaction-level monitoring rather than periodic reviews.
For advisors evaluating tokenized platforms, the central questions are what a client legally owns and how the client can recover the money. Due diligence includes identifying the asset custodian, checking independent verification of reserves or records, reviewing fees and conflicts, understanding withdrawal restrictions, and examining what happens if the platform fails. A platform should also have clear ownership records, segregated custody and an exit process if a temporary exemption changes or expires.
The Senate measure is not formally dead, but the chamber’s departure ahead of the November midterm elections makes its immediate path uncertain. In the meantime, the industry is standardizing around verified counterparties, separation of key functions, transaction-level controls and systems designed to operate across fragmented jurisdictions. Whether those practices eventually support federal legislation or become a parallel framework remains unresolved.