The CLARITY Act of 2025 Drops—Can It Stop the SEC and CFTC From Playing Crypto Whack-a-Mole?
After years of regulatory turf wars, bipartisan lawmakers just unveiled the CLARITY Act—a last-ditch effort to end the SEC vs. CFTC cage match over crypto oversight.
Will it work? Or is this just another political placebo for an industry tired of guessing which regulator will come knocking next?
Funny how ’clarity’ in Washington still means 300 pages of loopholes—Wall Street must be taking notes.
The New Bipartisan Crypto Bill Seeks to End SEC-CFTC Turf War
The 236-page bill is a successor to last year’s FIT21 legislation. While stablecoin regulation still leads the race to become the first comprehensive crypto law in the U.S., the CLARITY Act represents a major step forward in shaping broader crypto market structure rules.
At its core, the bill gives the CFTC exclusive jurisdiction over digital commodity spot markets. These WOULD be governed by new entities registered with the agency.
Crypto platforms would have the option to register with either the CFTC or the SEC, depending on whether they handle digital commodities like Bitcoin or securities, or both.
“Our bill brings long-overdue clarity to the digital asset ecosystem and prioritizes consumer protection and American innovation,” said Representative Hill. “It builds off our work in the 118th Congress.”
The legislation introduces comprehensive registration regimes, allowing crypto firms to legally operate in the U.S. It also lays out disclosure and compliance requirements for developers and intermediaries.
These include detailed project disclosures, segregation of customer funds, and conflict-of-interest mitigation.
“The CLARITY Act will deliver clear rules of the road that entrepreneurs, investors, and consumers deserve,” said Representative Ritchie Torres, one of the bill’s backers.
Representative Dusty Johnson, who leads the agriculture subcommittee on digital assets, added: “America should be the global leader in the digital assets marketplace, but we can’t do that without establishing a clear regulatory framework.”
U.S. Lawmakers Push Crypto Reform Bill Clarifying Custody, Stablecoin, and DeFi Oversight
The bill covers long-disputed areas, including the regulation of custodians and decentralized finance (DeFi). It rejects the SEC’s prior attempt to require custody firms to hold customer assets on their own balance sheets.
Instead, it sets a standard for “qualified digital asset custodians,” which would be defined by the CFTC based on federal, state, or foreign oversight.
NEW: Chairman @RepFrenchHill today introduced the CLARITY Act, a bipartisan bill which would establish a regulatory framework for digital assets in the US.
Read more
https://t.co/fV7N7aXAdb pic.twitter.com/5ZIpFTcDDD
Some issues, like DeFi and NFTs, are deferred. The legislation tasks the SEC, CFTC, and the Treasury Department with studying these sectors and reporting back within a year. The Government Accountability Office is also directed to prepare reports on DeFi and NFTs.
The bill explicitly exempts some decentralized wallet providers and DeFi platforms from SEC oversight. It also clarifies that payment stablecoins are not securities, placing regulatory authority with whichever agency already oversees the firm engaged in the activity.
All told, the CLARITY Act sets a tight one-year timeline for regulators to write and implement the rules if the bill becomes law.
That schedule is viewed by some as ambitious, especially given the complexities of financial regulation. Some provisions in the Dodd-Frank Act, passed in 2010, are still not finalized.
NEW: US Digital Asset Market Structure bill, the CLARITY Act:
1. Clarifies CFTC vs. SEC (defining commodities & securities).
2. Unified federal licensing and registration regime.
3. Stablecoin and DeFI carve-outs. https://t.co/ZTosDCUudA pic.twitter.com/OTShEAebrn
Whether the House and Senate will align on crypto regulation is still unclear. The Senate is expected to resume debate next week on its stablecoin bill, which has made procedural progress but faces partisan concerns.
Some lawmakers have floated the idea of combining the stablecoin and market structure bills, though such a MOVE could complicate passage.
President Donald TRUMP has pushed for both bills to reach his desk by the August congressional recess, but crypto insiders in Washington view that timeline as unlikely.
For now, the bipartisan CLARITY Act gives lawmakers and regulators a new framework to work with and puts renewed pressure on Congress to end the longstanding confusion over crypto regulation in the United States.
