U.S. "CLARITY Act" Seeks to Clarify Where Crypto Falls Between the SEC and CFTC

According to CoinDesk, the U.S. Congress's CLARITY Act is designed to tackle one of the crypto industry's most persistent questions: which federal regulator should oversee digital assets—the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). The legislation has drawn bipartisan support in the House of Representatives as of July 2025 and cleared a key Senate committee as of May 2026. For years, overlapping and uncertain jurisdiction has shaped U.S. crypto oversight. The SEC has generally treated most tokens as securities and relied heavily on enforcement actions, while the CFTC has viewed Bitcoin and certain other tokens as commodities. That split has kept issuers, exchanges, and developers in a prolonged state of uncertainty, and has pushed some firms to move operations to overseas markets with clearer rules. At the center of the CLARITY Act is a three-part statutory classification framework for digital assets, with different regulatory regimes attached to each category: - Digital goods: regulated by the CFTC - Investment contract assets: regulated by the SEC - Licensed payment stablecoin: governed under a separate framework Under this structure, "digital goods" largely refers to network tokens that are highly decentralized, provide practical utility, and are not controlled by a single entity, with Bitcoin cited as the leading example. Tokens that function more like investment instruments would remain subject to securities-law disclosure and investor-protection requirements. A notable element of the proposal is that a token's classification could change as a project develops. CoinDesk notes that many projects begin with more centralized teams and investor expectations tied to managerial execution—traits that resemble securities. As networks decentralize and tokens take on clearer functional uses, they may begin to look more like commodities. Under the bill, assets could start under SEC oversight and later transition to CFTC supervision once they meet the law's decentralization and utility standards. The approach is intended to separate early-stage fundraising from later-stage network operation, rather than applying a single regulatory label across an asset's entire life cycle. The bill also adds platform and market-participant requirements aimed at weaknesses highlighted by past industry blowups. These include segregation of customer funds, disclosure of conflicts of interest, and broader compliance standards. Given its legislative momentum, the CLARITY Act is viewed as closer to enactment than many prior U.S. crypto market-structure proposals. If it ultimately clears the Senate and receives the president's signature, it could move the industry away from rulemaking by enforcement and litigation toward a more explicit statutory framework.