The CLARITY Act (H.R. 3633), introduced on May 29, 2025 by Rep. French Hill, now passed the House (July 17, 2025), creates a definitive crypto regulatory framework. It classifies digital assets into three categories—with roles assigned clearly to the CFTC (for decentralized digital commodities, e.g. mature blockchain tokens like BTC/ETH) and the SEC (for restricted digital assets, investment‑contract assets) . Tokens that evolve toward decentralization may migrate from SEC to CFTC oversight via a “maturity” test . The Act mandates registration and strong AML/KYC compliance for exchanges and intermediaries under the Bank Secrecy Act . It also explicitly addresses DeFi, exempting fully decentralized systems from intermediary regulations while preserving self‑custody rights . The CLARITY Act is expected to unlock broader institutional adoption by reducing legal uncertainty—forming a clearer path for banks, exchanges, and innovators .
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The Act now awaits Senate consideration, with an updated market‑structure draft issued by the Senate Banking Committee on July 22, 2025 .
