Regulatory Showdown: How the CLARITY Act Exposes the SEC-CFTC Power Struggle

The CLARITY Act isn’t just another piece of legislation—it’s a grenade tossed into the regulatory turf war between the SEC and CFTC. And everyone’s scrambling for cover.

Subheader: The Regulatory Circus Finally Gets a Spotlight

For years, the SEC and CFTC have been locked in a bureaucratic slap-fight over crypto jurisdiction. The CLARITY Act forces them into the ring—no more shadowboxing. Will this finally bring order to the chaos? Don’t hold your breath.

Subheader: Why Crypto Wins Either Way

While the agencies bicker over who gets to hold the leash, decentralized finance keeps eating their lunch. TradFi’s red tape can’t keep up with code that rewrites itself. The irony? Regulators are still using fax machines to debate the future of finance.

Closing jab: Nothing unites rivals like a common enemy—unless that enemy is innovation. Then it’s every bureaucrat for themselves.

CLARITY Act explained

Remarking on the same, in a statement on the 29th of May, Hill said,

“I am proud to introduce the bipartisan CLARITY Act with my colleagues. Our bill brings long-overdue clarity to the digital asset ecosystem, prioritizes consumer protection and American innovation, and builds off our work in the 118th Congress.”

The three Democratic lawmakers supporting the bill were Angie Craig, Ritchie Torres, and Don Davis, alongside Republican sponsors.

That said, the bill’s language broadly defines digital assets “intrinsically linked to a blockchain system” as digital commodities, provided they are primarily used to transfer value within that system.

This sweeping definition potentially brings nearly all major cryptocurrencies, including ethereum [ETH], Solana [SOL], Cardano [ADA], Ripple [XRP], and Dogecoin [DOGE], under the Commodity Futures Trading Commission’s purview.

However, there’s a catch.

Assets that qualify as securities remain the SEC’s turf, but the bill offers no sharp line for when something stops being a commodity and becomes a security.

That gray zone may still spark debate.

Ripple’s legal chief weighs in

As expected, Ripple’s Chief Legal Officer, Stuart Alderoty, welcomed the legislation, calling it a meaningful advancement in crypto oversight.

He emphasized, 

“A big step forward: the bipartisan CLARITY Act builds on momentum for comprehensive crypto rules in the U.S.

The broader takeaway?

As the CLARITY Act heads for a full markup by the House Financial Services Committee on the 10th of June, efforts toward comprehensive crypto regulation are steadily gaining traction.

Interestingly, the bill’s progress runs in parallel with the GENIUS Act, which targets stablecoins. That bill recently cleared a key Senate vote, with 66 in favor—another sign of bipartisan support for clear crypto rules.