US Crypto Rules Face a Political Durability Test
The United States now has more crypto regulation than it did two years ago, but a critical question is hanging over every compliance calendar and audit plan: how much of it will still be in force after the next election? A commentary published by Cointelegraph on 6 October 2026, authored by former New York Governor Andrew Cuomo, sets out the case that agency-driven rulemaking, however detailed and well-intentioned, is structurally fragile without the backing of a congressional mandate. For accounting firms advising digital asset clients, CFOs managing crypto on the balance sheet, and auditors signing off on disclosures, that fragility is a live operational risk, not a theoretical one.
Where the CLARITY Act Left Things
The CLARITY Act was designed to resolve the foundational ambiguity in US digital asset regulation: which assets are securities, which are commodities, who has jurisdiction, and what the compliance obligations are for each category. The House passed the bill in 2025. The Senate did not, and the legislation has not reached the president's desk.
What the bill would have done
Had it been enacted, the CLARITY Act would have given the SEC and the CFTC explicit, codified roles in digital asset oversight. Businesses would have had a statutory definition of a digital commodity versus a digital security, a defined path to compliance, and a legal basis for investment and hiring decisions. Without it, those definitions remain contested, and the boundary between the two agencies' jurisdictions is still being drawn through rulemaking rather than legislation.
The gap-filling that followed
In the absence of a market-structure law, both the SEC and the CFTC have moved aggressively using their existing statutory authority. The CFTC has proposed a federal framework for crypto trading platforms; the SEC has advanced its own rules for custody and market conduct. The CFTC proposed federal framework for crypto trading platforms is one of the more substantive outputs of that activity. These are real rules with real compliance implications. The problem Cuomo identifies is not their content but their legal foundation: they rest on agencies stretching existing authority rather than on a new statute explicitly authorising the activity. That distinction matters enormously when political control shifts.
Why Agency Rules Are Politically Vulnerable
Congress has a toolkit for unwinding agency action that is broader than most practitioners appreciate. Understanding it is essential for any firm trying to assess how durable the current regulatory landscape actually is.
The Congressional Review Act
Before a new major rule takes effect, agencies must submit it to Congress. Lawmakers then have a window to pass a joint resolution of disapproval. If that resolution passes and the president signs it, the rule is void and the agency is barred from issuing a substantially similar rule without new statutory authority. For rules adopted during one administration, a Congress controlled by the opposing party can deploy this mechanism with relative speed.
Funding and oversight pressure
Beyond outright repeal, Congress can constrain agency action through appropriations riders that prohibit spending on specific enforcement activities, through committee oversight hearings that consume agency leadership time and create litigation risk, and through subpoenas that produce document discovery burdens. Cuomo draws on direct experience: following the 1994 midterms, a Republican Congress used precisely these tools against the Clinton administration's Department of Housing and Urban Development, limiting what the department could accomplish regardless of what rules it had on the books.
The midterm dynamic in 2026
Cuomo's piece references prediction markets and current electoral trends suggesting Democrats could take one or both chambers of Congress after the 2026 midterms. He argues that a Democratic majority would be motivated to scrutinise rules adopted during the Trump administration, both on policy grounds and to pursue broader accountability narratives around regulatory capture. Whether that scrutiny leads to formal repeal, funding restrictions, or simply prolonged uncertainty, the effect on compliance planning is the same: the rules firms are building around today may not look the same in 12 to 18 months.
What This Means for Digital Asset Accounting
Regulatory uncertainty is not an abstract policy problem for accounting professionals. It has direct consequences for how firms advise clients, how they set up their own internal controls, and how much confidence they can place in a given technical accounting treatment.
Classification risk is not resolved
The question of whether a given token is a security or a commodity determines which disclosure regime applies, which custodian qualifications are required, and how the asset is treated on the balance sheet. FASB ASC 350-60 introduced fair-value accounting for certain crypto assets, but it applies narrowly to assets that meet specific criteria. If the underlying regulatory classification of an asset shifts because a rule is repealed or an agency's jurisdiction is curtailed, the accounting treatment may need to follow. Firms using crypto compliance reporting workflows tied to current agency guidance should build in a review trigger for any significant regulatory change.
Custody and counterparty rules remain in flux
The SEC's proposed relaxation of crypto custody rules for investment advisers is another area where agency action has moved ahead of statute. If those rules are challenged or withdrawn, clients who structured their custody arrangements around the proposed framework face rework. Auditors need to understand whether custody arrangements they are signing off on are compliant under settled law or under rules that carry a reversal risk.
Disclosure obligations could shift quickly
Firms with material crypto holdings need to disclose those holdings, the associated risks, and the valuation methodology in financial statements. Valuation methodology, in turn, depends partly on how an asset is classified and how liquid its market is, both of which are affected by the regulatory perimeter. A firm whose disclosures reference a specific regulatory framework should build a review cadence into its audit cycle that is sensitive to political developments, not just accounting standard updates.
The International Comparison and What It Signals
Cuomo points to the EU's Markets in Crypto Assets regulation and Singapore's Payment Services Act as examples of jurisdictions that have established durable statutory frameworks. The relevance for US-based firms is not that they need to relocate, but that their international counterparts are operating with a clearer compliance baseline. Cross-border transactions, fund structures with non-US investors, and multinational treasury operations all become more complex when the US side of the equation is uncertain. Firms advising clients on where to establish entities, custody assets, or list products are already weighing regulatory stability alongside tax and cost factors.
For a deeper look at how agency-level rulemaking has evolved in the absence of legislation, see our earlier coverage on how the CLARITY Act stall is reshaping CFTC rulemaking.
Practical Steps for Firms and CFOs Now
Given the landscape Cuomo describes, there are concrete actions firms can take to reduce exposure to regulatory reversal risk without halting digital asset advisory work.
Build adaptability into compliance architecture
Crypto bookkeeping software and digital asset accounting software configurations that are tied to a single regulatory interpretation are expensive to rebuild if that interpretation changes. Where possible, firms should parameterise classification logic so that a reclassification event (security to commodity, or vice versa) triggers a workflow rather than a manual rebuild. This applies to both client-facing advisory tools and internal ledger systems.
Document the regulatory basis for every treatment
Any technical accounting position that rests on agency guidance rather than enacted statute should be flagged as such in working papers. This is not about being pessimistic; it is about maintaining audit trail integrity. If a rule is later repealed, the firm needs to demonstrate that its treatment was reasonable at the time and that it identified the relevant risk.
Monitor the Congressional calendar
The Congressional Review Act window is finite but consequential. Firms with clients exposed to rules adopted in the past year should track whether those rules have been submitted to Congress and whether any disapproval resolutions have been introduced. This is a monitoring task that can be embedded in a quarterly regulatory update process rather than requiring constant attention.
Engage with clients on scenario planning
CFOs and boards overseeing material crypto holdings should be presented with at least two scenarios in their risk register: one where current rules persist and one where key rules are reversed or significantly amended. The financial statement impact of each scenario, particularly on asset classification, custody costs, and disclosure obligations, is a legitimate topic for audit committee discussion right now.
Source: Cointelegraph
Frequently Asked Questions
Does the failure of the CLARITY Act mean there are no US crypto regulations?
No. Both the SEC and CFTC have issued substantive rules using their existing statutory authority, and those rules carry real compliance obligations now. The issue is that rules created through agency action rather than statute are more susceptible to political reversal via the Congressional Review Act, funding restrictions, or future agency guidance that pulls in a different direction.
How does the Congressional Review Act affect crypto rules specifically?
Any major new rule must be submitted to Congress before it takes effect. A simple majority in both chambers, combined with a presidential signature, can void the rule. The agency is then barred from issuing a substantially similar rule without explicit new authorisation from Congress. For rules adopted without a supporting statute, this is a meaningful reversal mechanism.
Should firms change how they use crypto accounting software given regulatory uncertainty?
Not necessarily change, but firms should ensure their digital asset accounting software and bookkeeping workflows are configured to flag assets whose regulatory classification is uncertain or dependent on agency guidance that could be reversed. A modular approach to classification logic reduces the rework cost if the regulatory perimeter shifts.
What should auditors include in working papers for crypto-related positions?
Working papers should identify whether each accounting position rests on enacted statute, a final agency rule, a proposed rule, or informal agency guidance. Positions that depend on agency action rather than law should be flagged with a note on the reversal risk and the potential accounting consequences if that action is unwound.
How does this compare to the regulatory environment in Europe or Asia?
The EU's MiCA regulation and Singapore's Payment Services Act are both statutory frameworks, meaning they were passed by legislative bodies and carry the durability that comes with that process. Multinational firms and funds with investors in those jurisdictions benefit from a clearer, more stable compliance baseline on those sides of their operations. The US contrast is relevant when advising clients on entity location, custody structure, and product listing decisions.