Wall Street is moving ahead with its own standards for digital assets while federal lawmakers remain stalled, according to the latest edition of "Crypto for Advisors," CoinDesk's weekly newsletter unpacking digital assets for financial advisors.

When the U.S. Senate failed to advance the CLARITY Act, a digital asset market structure bill, on Sept. 15, the country was once again left without a comprehensive federal framework for digital assets. Regulators moved to fill part of the gap: two days later, the SEC issued an "innovation exemption" allowing certain venues to trade tokenized U.S.-listed stocks onchain.

But an exemption is not a statute, and it can be narrowed or withdrawn as easily as it was granted. That leaves financial firms with a practical question: what do you build while you wait?

For advisors, the answer matters more than who won or lost in Washington. That question ran through a Crain's New York Business event last week, whether the topic was tokenization, compliance or cybersecurity. The people closest to the work aren't waiting for Congress — they're building for the world as it is.

A Legal Patchwork With a Price Tag

Adam Schumann, vice president of legal at OKX, laid out the legal problem. U.S. firms answer to federal statutes, federal agencies, state laws and state regulators, and none of them move at the same speed. "You want general consistency, but you're not going to reach uniformity," he said.

Firms work out the rest state by state and country by country, while agencies patch the most immediate gaps. That patchwork has a cost. Aravind Raju, CFO of Uphold, said compliance is now one of the company's largest departments because it builds tailored solutions for each state's requirements. As rules become clearer and more aligned, he expects those resources can be redirected.

For advisors, the takeaway is that compliance is a real cost of doing business on these platforms, and the firms that manage it well will have an edge.

Fragmented Networks, Separated Risk

One might expect that duplication to push the industry toward shared infrastructure. Instead, many institutions launched private, closed networks this year for tokenized assets, stablecoins and securities ledgers — and those networks can't easily talk to one another. Lewis Tuff, CEO of Twilight, which builds clearing and settlement technology, said the result is that every firm ends up rebuilding the same connections.

Risk, meanwhile, is moving in the opposite direction: toward separation. Early crypto firms bundled trading, custody and clearing under one roof. Today, traditional custodians hold digital assets, and the venues that execute trades are increasingly separate from the ones that safeguard them. That means no single entity has to hold every key function or become a single point of failure.

Compliance and security are shifting too, from annual attestations and periodic reviews to checks that run continuously, with every transaction.

None of this required Congress — and that's the point. Without a comprehensive framework, the industry is converging on practices any future law would find hard to ignore: verified counterparties, clear lines between trading and custody, and compliance that never stops running. Whether these practices become a bridge to legislation or a substitute for it remains an open question, but the direction is clear.

Raju offered one prediction. Within three years, he said, "we'll probably stop using the word 'crypto' as tokenized Treasuries and money funds become routine." If he's right, the infrastructure being built now, without a statute to guide it, will matter well beyond this cycle.

The newsletter column was authored by Eric Soufer, partner and head of advanced tech at Tusk Strategies, with an introduction from Sarah Morton.

Ask an Expert: Vetting Tokenized Platforms

In the newsletter's "Ask an Expert" segment, Diego Grassano — commercial director at Shyft and chief product officer at Lumia — addressed three questions on regulatory risk and due diligence.

On regulatory vulnerability: Asked how risky it is for institutions to pour capital into infrastructure built on temporary SEC exemptions and state-level workarounds, Grassano said the main risk is committing long-term capital to infrastructure that may only have temporary permission to operate. Exemptions can help institutions get started, but they need a credible plan if those permissions change or expire. "I'd want clear ownership rights, segregated custody and a tested exit route that allows investors to recover their assets," he said.

On solving fragmentation: Asked how institutions can bridge siloed, private blockchains without compromising security or regulatory isolation, he said institutions need to connect networks without losing control over ownership, compliance or privacy. Bridges are improving but still carry real security and operational risks. While regulatory standards remain fragmented, he would keep the legally recognized ownership record on the original chain and allow backed, redeemable representations to circulate elsewhere, with eligibility and transfer restrictions enforced on both networks.

On actionable advisor takeaways: Asked what criteria financial advisors should use to vet tokenized platforms while federal investor protections remain in limbo, Grassano said he would start with two questions: What does the client actually own, and how do they get their money back? Advisors should then check who holds the assets, who independently verifies the numbers and what happens if the platform fails, and look closely at fees, conflicts and withdrawal restrictions. "If an advisor cannot clearly explain the ownership structure, the risks and the recovery process to a client, the due diligence is not finished," he said.

Elsewhere at CoinDesk

• The U.S. Commodity Futures Trading Commission (CFTC) has published its first proposed regulatory framework for crypto markets.
• AI agents are driving record transactions through Coinbase's x402 protocol on Base, the company's layer-2 network, with U.S. wallets dominating AI model inference payments, according to a Chainalysis report.
• A batch of 100 bitcoin mined for pennies in the Satoshi era — now worth $8.5 million — has moved for the first time in 16 years.

This article is based on CoinDesk's "Crypto for Advisors" newsletter, published Oct. 15.