U.S. Proposes the CLARITY Act to Clarify SEC and CFTC Oversight of Digital Assets

Article by: Cointelegraph

Translated by AididiaoJP, Foresight News

The CLARITY Act proposes a clear division of responsibilities between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to define how digital assets, exchanges, disclosure requirements, and regulation should function within the U.S. cryptocurrency market.

• Clarify definitions and responsibilities: This bill aims to address years of regulatory uncertainty with a clear, structured framework, defining what constitutes digital assets, outlining the roles of intermediaries, and specifying the information that must be disclosed.
• The CFTC and SEC have distinct responsibilities: the CFTC will regulate spot trading of most compliant tokens, while the SEC continues to oversee issuance, disclosure, and investor protection in the primary market.
• Managing both assets and behavior: The bill focuses not only on the assets themselves but also on regulating market conduct, establishing registration and conduct standards for exchanges, brokers, and dealers to enhance market integrity and transparency.
• Complements the Stablecoin Act: Stablecoins are primarily regulated by the GENIUS Act, while the CLARITY Act serves a supplementary role in related areas, such as disclosure requirements and incentive functions involving stablecoin usage.

The CLARITY Act (Digital Asset Market Clarity Act of 2025) seeks to break the legislative stalemate in the industry through a two-pronged approach: clarifying the definition of digital assets and assigning regulatory authority based on their actual functions in the market. This legislation aims to move away from the past practice of case-by-case enforcement and instead establish a comprehensive framework for asset classification, intermediary roles, and mandatory disclosure requirements.

This article will explain what the CLARITY Act is and why it matters, outline its objectives, and explore how it intends to regulate stablecoins. It will also cover the concept of mature blockchains, the main arguments against the bill, and its legislative progress.

The CLARITY Act addresses a long-standing issue in the crypto space: regulatory uncertainty.

For years, digital asset companies have faced the challenge of unclear jurisdiction between the SEC and the CFTC. The SEC has often classified many tokens as securities, while the CFTC has categorized them as commodities. This gray area has slowed innovation, complicated compliance efforts, confused investors, and created significant challenges for crypto businesses.

The goal of the CLARITY Act is to break this deadlock by clearly defining digital assets and assigning regulatory responsibilities based on asset type and associated activities. With a predefined, clear framework, market participants will know from the outset which rules they must follow, rather than facing uncertainty through reactive enforcement actions.

The bill primarily establishes the relevant regulatory framework through the following three methods:

Define asset classes more precisely

The CLARITY Act introduces the concept of "digital commodities," defined as digital assets whose value primarily derives from the underlying blockchain system on which they are used. This definition excludes traditional securities and stablecoins, thereby placing spot trading of many qualifying tokens under the jurisdiction of the CFTC. Reflecting the actual operation of blockchain networks, this definition particularly emphasizes the functionality of the blockchain and the degree of network decentralization.

Clarify the regulatory boundaries

The bill divides regulatory authority by function:

• The CFTC has gained primary authority over digital commodity trading, particularly on secondary markets, spot markets, and trading platforms.
• The SEC retains authority over primary market offerings, investor protection, required disclosures, and initial sales.
• The bill also encourages the two agencies to jointly develop rules in overlapping areas such as disclosure requirements.

Establish unified disclosure standards and codes of conduct

To protect investors and ensure market fairness, the bill requires developers and issuers to provide standardized disclosures. These disclosures must cover technical details of the blockchain, tokenomics models, and key risks, enabling market participants to evaluate different projects using comparable information. Intermediaries such as digital commodity exchanges, brokers, and dealers must also meet requirements for registration, reporting, and regulatory oversight, with trading-related activities primarily regulated by the CFTC.

Overall, the CLARITY Act seeks to replace gray areas with clear rules, supporting industry innovation while protecting investors and maintaining market integrity.

Debates over cryptocurrency market structure are influencing policymakers' thinking on how to regulate AI models, as both involve difficulties in assigning responsibility and rapid innovation cycles.

The GENIUS Act, passed in 2025, has established a federal regulatory framework for payment stablecoins. It stipulates that eligible stablecoins are not classified as securities or commodities, provided they meet strict reserve, redemption, and regulatory requirements.

The CLARITY Act will not supersede or duplicate the regulatory framework for this stablecoin. Instead, its provisions serve as complementary measures, particularly regarding rewards related to stablecoins, disclosure requirements, and how they interact with the broader digital asset market.

Given that assets evolve, the CLARITY Act establishes a pathway for blockchains to achieve "mature" status once they meet certain levels of decentralization and other functional criteria.

Once the "maturity" criteria are met, the associated tokens are reclassified as "digital commodities" and fall under the jurisdiction of the CFTC. If the project satisfies other conditions, this can significantly reduce its regulatory burden, such as potentially eliminating the need for registration.

The concept of a "mature blockchain" reflects the idea that as a network becomes increasingly decentralized and widely distributed, the way it is regulated should also evolve accordingly. It provides projects with a clearer path toward potentially applying more relaxed compliance requirements in the future.

In past regulatory disputes, courts have sometimes relied on securities law precedents from decades ago to determine the nature of crypto tokens, highlighting how existing legal frameworks are being forcibly applied to entirely new digital markets.

Although the bill aims to bring clarity, concerns remain. Critics argue that its definitions may still have loopholes, particularly in the decentralized finance (DeFi) space, as these projects often struggle to fit into traditional regulatory frameworks.

Some also argue that the investor protections offered by the bill fall short of existing securities law standards. Other concerns focus on potential jurisdictional overlap, such as how the SEC’s anti-fraud authority would apply in areas primarily overseen by the CFTC, particularly for tokens with multiple characteristics.

In July 2025, the U.S. House of Representatives passed the CLARITY Act (H.R. 3633) with bipartisan support. As of January 2026, the bill is pending action in the Senate and has been referred to the Senate Committee on Banking, Housing, and Urban Affairs for review. The legislative process also involves the Senate Committee on Agriculture, Nutrition, and Forestry providing input on matters related to CFTC oversight.

As of January 2026, the relevant Senate committee has held hearings, released discussion drafts, proposed amendments, and advanced several versions of broader market structure legislation. However, revisions and refinements to the bill have been delayed and adjusted due to disagreements over issues such as stablecoin yields and investor protection. Coordination between the Senate draft and the bill passed by the House is still ongoing, and the Senate has not yet held a final vote.

If ultimately passed in a coordinated form, the CLARITY Act would become the first comprehensive federal legal framework in the United States targeting the structure of the digital assets market.

Some blockchain networks now publish real-time transparency dashboards showing validator concentration, token velocity, and governance participation. Regulators sometimes reference this data when discussing whether a network is “sufficiently decentralized.”

The core of the CLARITY Act is to address a long-standing issue in the crypto space: unclear regulatory boundaries, which hinder innovation and lead to reactive enforcement rather than proactive compliance.

The bill aims to create a more predictable regulatory environment by clearly defining asset classes, mandating standardized disclosures, and clarifying the division of responsibilities between the SEC and CFTC, so market participants know exactly what rules they must follow from the start.

Of course, legislation is only the first step. How it is implemented, how specific regulations are crafted, and potential future adjustments will determine the actual impact of the CLARITY Act. Whether it ultimately delivers the promised clarity will profoundly influence the trajectory of U.S. crypto policy and industry competitiveness in the coming years.