Main Points:
- Both the House Agriculture Committee (47–6) and the Financial Services Committee (32–19) approved the CLARITY Act, sending it to the full House for a floor vote.
- The bill clearly delineates regulatory jurisdiction between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
- Mandatory consumer protections include segregation of customer funds, enhanced disclosures, and minimum capital requirements for exchanges.
- DeFi platforms and software developers are explicitly exempted from money transmitter classification, reducing legal uncertainty for non-custodial services.
- Industry stakeholders broadly welcome the measure, though concerns linger over regulators’ staffing and funding.
- Parallel legislation—Senate’s GENIUS Act on stablecoins—and key regulatory appointments (e.g., CFTC chair nomination) underscore a broader push for U.S. crypto leadership.
Committee Approvals Mark a Major Milestone
On June 10 and June 11, 2025, the U.S. House Agriculture Committee and the Financial Services Committee each voted to advance H.R. 3633, known as the Digital Asset Market Clarity (“CLARITY”) Act, by margins of 47–6 and 32–19, respectively. These dual approvals reflect a rare moment of bipartisan alignment on cryptocurrency regulation, leveraging each committee’s jurisdictional expertise to craft a comprehensive framework for digital assets.
Division of Regulatory Authority: SEC vs. CFTC
A central feature of the CLARITY Act is its precise division of oversight between the SEC and CFTC. Under the bill:
- Securities Treatment: Digital assets deemed “investment contract assets” (e.g., tokens sold to raise capital) fall under SEC authority, subject to securities laws and existing registration requirements.
- Commodity Treatment: “Digital commodity assets” (including mined, airdropped, or otherwise distributed tokens not tied to fundraising) come under exclusive CFTC jurisdiction, requiring provisional registration as commodity exchanges or brokers within 180 days of enactment.
- Streamlined Dual Registration: SEC-registered broker-dealers and alternative trading systems wishing to facilitate digital commodity trading may “notice-register” with the CFTC via a tailored process, avoiding duplicative rulebooks.
This bifurcated approach addresses long-standing industry confusion by aligning regulatory treatment with economic function rather than token form, aiming to eliminate jurisdictional overlap and conflicting mandates.
Consumer Protections and Capital Requirements
To bolster market integrity and safeguard investors, the CLARITY Act imposes several key obligations on regulated entities:
- Segregation of Customer Funds: Exchanges and brokers must hold customer assets in accounts separate from their own operational capital, mirroring trust-account requirements in traditional finance.
- Mandatory Disclosures: Digital asset firms must publish clear disclosures about fees, conflicts of interest, custody practices, and smart-contract risks.
- Capital Maintenance: Market intermediaries are required to maintain minimum levels of capital proportional to their customer liabilities, designed to buffer against insolvency and reduce systemic risk.
Lawmakers emphasize that these protections will help avert another collapse akin to FTX, strengthening U.S. financial stability while preserving room for innovation.
Carving Out DeFi and Developer Exemptions
A pivotal amendment adopted on June 10 clarifies that non-custodial DeFi platforms and software developers are not to be classified as money transmitters or unlicensed remittance providers. Specifically:
- DeFi Exemption: Protocols enabling peer-to-peer transactions without centralized fund custody are excluded from money transmission rules.
- Developer Safe Harbor: Entities solely engaged in software development, node operation, or network maintenance—without handling customer funds—are exempt from registration and licensing as financial intermediaries.
By shielding DeFi actors from onerous licensing, the CLARITY Act reduces legal risk for decentralized innovation while preserving anti-fraud and anti-manipulation authority for both agencies.
Industry and Political Reactions
Crypto industry groups—including Uniswap Labs, the Blockchain Association, and the Digital Chamber of Commerce—hailed the inclusion of the Blockchain Regulatory Certainty Act (BRCA) provisions, which ensure non-custodial developers avoid arbitrary enforcement actions. Oregan Representative Andrea Salinas (D) praised the bill as “not perfect, but a significant step toward protecting consumers and covering operational costs of exchanges,” noting that clear capital requirements will help prevent future exchange failures. However, she also warned that both the SEC and CFTC face chronic staffing and budget shortfalls, risking delays in rule-writing and enforcement.
Meanwhile, former CFTC Chair Timothy Massad and Atlantic Council fellow Carole House cautioned in an Axios Crypto newsletter that over-fragmentation between agencies could create loopholes, advocating for joint rulemakings and clearer interagency coordination under the Act’s broad grants of discretion.
Parallel Legislative Momentum on Stablecoins
Simultaneously, the Senate is advancing the GENIUS Act to regulate stablecoin issuers, with a full chamber vote expected in the coming weeks. The GENIUS Act would impose capital, reserve, and transparency requirements on issuers of dollar-pegged tokens—addressing risks highlighted by Tether and other large stablecoin projects. This coordinated House-Senate push signals a concerted effort by Congress to reinforce U.S. leadership in digital finance before global competitors fill the regulatory void.
Regulatory Appointments and Macro Drivers
The CFTC’s next chair—Brian Quintenz—is undergoing confirmation hearings, with expectations that his priorities will closely align with the CLARITY Act’s market structure vision. Concurrently, debate over memecoins and institutional engagement continues to shape the policy landscape, as regulators grapple with balancing decentralized innovation against investor protection.
Macro tailwinds also bolster the Act’s timing: rising federal debt, proposed tax cuts, and overall fiscal uncertainty have fueled narratives positioning crypto as a hedge—driving renewed institutional interest and cryptocurrency treasury allocations among public companies.
Looking Ahead: Full House Vote and Implementation
With committee approvals secured, the CLARITY Act will proceed to the full House floor, where debate is expected to focus on technical definitions, enforcement funding, and the scope of anti-fraud powers. Should the bill pass the House, reconciliation with the Senate’s stablecoin framework will be required, followed by presidential approval. Regulatory rulemakings under both the SEC and CFTC would then commence, kicking off an 18-month provisional registration period and subsequent final rule adoption.
Conclusion
The CLARITY Act represents a landmark legislative effort to bring coherence, consumer protection, and growth-friendly guardrails to the U.S. digital asset market. By clearly allocating responsibilities between the SEC and CFTC, mandating rigorous disclosures and capital standards, and exempting non-custodial innovation, Congress aims to strike a careful balance between oversight and entrepreneurship. As parallel stablecoin legislation advances in the Senate and key regulatory appointments loom, the United States is poised to solidify its position as a global leader in cryptocurrency and blockchain technology—if timely funding, interagency coordination, and thoughtful rulemaking follow through on the CLARITY Act’s promise.
