#CryptoClarityAct The CLARITY Act is a bipartisan bill introduced on May 29, 2025, by Congressman French Hill, aimed at providing a clear regulatory framework for digital assets in the US and accurately defining the scope of the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission).

It replaces the previous FIT21 bill, which had been passed in the House in 2024 but did not advance in the Senate.

🧭 Key Provisions:

🔹 Classification of Digital Assets

•Defines clear categories:

•Digital Commodities: fully decentralized assets without financial or governance rights. Regulated by the CFTC (e.g., Bitcoin, Ethereum).

•Restricted Digital Assets: assets with investment contract characteristics and linked to an issuer, regulated by the SEC.

•Permitted Payment Stablecoins: stablecoins primarily regulated by the GENIUS Act, with joint oversight from the SEC and the CFTC.

📊 Jurisdiction and Registration:

•CFTC oversees decentralized commodities; SEC manages digital securities.

•Platforms dealing with both types can register with both agencies or choose based on their primary operation.

🏛️ Regulatory Division:

•Regulatory sovereignty moves from ambiguity to a structured model that considers the degree of decentralization of each asset.

🔧 Innovations and Implications:

✅ Decentralization as a Criterion:

•The law defines “mature blockchains” as those without unilateral control and that meet measurable criteria (e.g., limit on tokens held by the same group).

•Projects a window of up to 4 years to achieve this level of decentralization and migrate from SEC jurisdiction to CFTC jurisdiction.

🧾 Funds and Transparency:

•Allows fundraisers of up to US $75 million with restrictions for founding traders until the network reaches maturity.

•Requires disclosures on operation, ownership, structure, and segregation of client assets.

⚖️ DeFi and Self-Custody:

•The project recognizes and protects truly decentralized DeFi protocols, exempting them from some regulatory requirements.

•Guarantees the right to self-custody and prohibits custodians from being required to hold assets on their own balance sheet.

💼 Regulated Platforms:

•Exchanges, brokers, and intermediaries must:

•Segregate client funds.

•Disclose conflicts of interest.

•Subject to similar standards as financial institutions under the Bank Secrecy Act (AML/KYC).

⚠️ Limitations and Criticisms:

•Consumer protections considered weak, especially regarding reserve requirements for stablecoins and dispute and compensation mechanisms.

•The law does not fill all the gaps in state regulation, allowing for regional discrepancies.

•There are still concerns that the focus on decentralization may reduce the SEC's power to protect retail investors.

🏛️ Current Legislative Status:

•June 10, 2025: was approved by the House Financial Services and Agriculture Committees.

•July 17, 2025: passed in the House by 294 to 134 votes during the so-called **“Crypto Week”*. The GENIUS Act passed along with regulatory clarity regarding stablecoins.

•Now, it moves to Senate consideration, where a parallel process is underway in the Banking Committee. A reconciled version between the House and Senate is expected by the end of 2025.

🧩 Why It Matters:

•Brings legal certainty to the crypto sector in the US, clearly distinguishing who regulates what.

•Facilitates the operation of DeFi companies, exchanges, and stablecoin issuers with greater legal predictability.

•Prepares the country for broader institutional adoption (banks, brokers, funds).

•Aligns the US with global standards already in place in other jurisdictions (e.g., MiCA in the EU).

However, there is caution regarding the law's ability to balance innovation with sufficient protections for consumers and retail investors.