Wall Street Builds Crypto Infrastructure While Congress Waits
Wall Street builds crypto infrastructure despite Congress delay, shaping compliance, custody and tokenization practices for advisors.
According to CoinDesk, the Senate failed to advance the CLARITY Act on Sept. 15, 2026, leaving the United States without a comprehensive federal framework for digital assets. Two days later the SEC issued an “innovation exemption” that temporarily allows certain venues to trade token‑listed U.S. stocks on‑chain.
The fallout is a wave of private‑network building, fragmented compliance work and a shift in how advisors think about tokenized products.
What happened
Congress stalled on a national crypto law, and regulators filled the gap with a narrow exemption. The exemption is not a statute; it can be narrowed or withdrawn at any time. In response, financial firms have started to standardize compliance and infrastructure on a case‑by‑case basis. Adam Schumann of OKX highlighted that U.S. firms must answer to federal statutes, multiple agencies, state laws and state regulators, none of which move at the same speed. Aravind Raju, CFO of Uphold, said compliance has become one of the company’s largest departments because it must tailor solutions for each state’s requirements. Meanwhile, firms such as Twilight are launching private, closed‑network ledgers for tokenized assets, stablecoins and securities, and these networks cannot easily talk to one another. The result is that every institution ends up rebuilding the same connections.
Why it works that way
The SEC’s innovation exemption functions like a limited‑time permission slip. It says, “you may run this specific activity now, but we reserve the right to change the rules tomorrow.” Because the exemption is not backed by legislation, firms cannot rely on it for long‑term capital planning. That pushes them to design systems that can survive a regulatory swing.
Compliance costs rise when each state imposes its own reporting, licensing or custody rules. In a patchwork regime, the cheapest way to stay legal is to build internal teams that can interpret and implement divergent requirements. The alternative—waiting for a federal law—would leave firms unable to offer any tokenized products, which would cede market share to more agile competitors.
Separating trading, custody and clearing functions also reduces single‑point‑of‑failure risk. Early crypto platforms bundled all three under one roof, creating a concentration of operational risk. By assigning custody to traditional custodians and letting independent venues execute trades, firms create “verified counterparties” and clear lines of responsibility. Continuous compliance checks—automated, transaction‑level monitoring—replace annual attestations, because regulators expect real‑time evidence of rule adherence.
What changes because of it
The most visible change is the rise of private, siloed blockchains that host tokenized securities and stablecoins. Because these networks are not interoperable, the industry is investing in “bridges” that move assets between chains while preserving ownership records on the original ledger. The bridges carry security and operational risk, but they are currently the only way to achieve liquidity across isolated ecosystems.
Another shift is the growing importance of the compliance function itself. Firms that can demonstrate a robust, state‑by‑state compliance architecture will have an edge when advisors evaluate platforms. As Diego Grassano advises, advisors should first ask what the client actually owns and how they can recover it, then examine who holds the assets, who verifies the balances and what happens if the platform fails.
Finally, the language around digital assets may evolve. Raju predicts that within three years the industry will stop using the word “crypto” as tokenized Treasuries and money‑funds become routine. If that happens, the infrastructure being built today—continuous compliance, separated custody and private ledgers—will become the default backbone for a broader class of regulated securities.
What this means for advisors is clear: the lack of a federal statute has not frozen innovation; it has forced the market to adopt practices that any future law will likely codify. Advisors should watch for firms that can prove ownership rights survive a bridge, that keep custody separate from execution and that can pivot quickly if the SEC narrows the exemption. Those are the platforms likely to survive both regulatory shifts and the inevitable move toward mainstream tokenized finance.
