Unveiled: Fresh Crypto Regulation Bill by the U.S. Government
The United States has recently passed a significant piece of legislation aimed at clarifying the regulatory landscape of the crypto market. Known as the Digital Asset Market Clarity Act of 2025 (CLARITY Act), the bill seeks to strike a balance between regulatory oversight, investor protection, and fostering innovation.
The CLARITY Act assigns primary authority over centralized crypto commodity exchanges to the Commodity Futures Trading Commission (CFTC). These exchanges must register with the CFTC and comply with its operational rules. The CFTC also gains anti-fraud and anti-manipulation powers over cash or spot transactions in digital commodities.
The Securities and Exchange Commission (SEC) retains authority over securities, but entities registered with the SEC can engage in digital commodity trading, subject to streamlined CFTC registration and applicable SEC regulations. This integrated approach allows both SEC- and CFTC-registered intermediaries to operate within the crypto commodities market.
An amendment introduced in the House exempts certain non-controlling blockchain developers and service providers from being classified as money transmitters, thus protecting them from burdensome registration requirements. This move is intended to prevent over-regulation of developers involved in decentralized protocols and maintain innovation-friendly policies.
While the bill does not explicitly use the term DeFi, its emphasis on decentralization and the treatment of non-controlling developers implicitly provides some clarity on DeFi protocols. By distinguishing centralized exchanges (under CFTC jurisdiction) from decentralized services run by independent developers, the bill aims to create a clearer regulatory environment that could facilitate compliant DeFi activity without excessive agency discretion.
The CLARITY Act also addresses stablecoins, complementing other legislation focused on stablecoin regulation. There is bipartisan consensus on the importance of establishing sensible rules for stablecoins to promote market stability and growth. Lawmakers emphasize the need for a combined approach that sets clear regulatory standards while supporting innovation in stablecoin issuance and use.
The bill includes a formal "decentralization test" for crypto projects and stipulates that a project must not be under the control of a single party, with no more than 20% held by any single party. Large holders (those with over 10%) must be disclosed while a project remains centralized, according to the decentralization test.
The bill does not provide new information about disclosure requirements for large holders in centralized projects, according to the decentralization test. It's worth noting that retail investors no longer need to meet high income or wealth requirements to participate in the crypto market.
The CLARITY Act is part of a broader evolution of crypto regulations, providing clarification for DeFi protocols and stablecoins. The CFTC will take the lead on crypto commodities, while the SEC will oversee crypto tokens that are considered investment contracts. The bill does not allow a blockchain to be centrally owned, and stablecoins are defined but not treated as securities.
However, the separate stablecoin bill, known as the GENIUS Act, faces political pushback in the Senate. Despite this, the U.S. crypto market structure continues to move forward with the CLARITY Act, aiming to draw a clear line between who regulates what in the crypto space and promoting a pro-innovation environment.
The Digital Asset Market Clarity Act of 2025 (CLARITY Act) recognizes the Commodity Futures Trading Commission (CFTC) as the primary regulator of centralized crypto commodity exchanges dealing with bitcoin and other digital commodities, with these exchanges required to register and comply with the CFTC's rules. The Securities and Exchange Commission (SEC) remains responsible for securities, but it allows entities registered with the SEC to engage in digital commodity trading, subject to streamlined CFTC registration and specific SEC regulations.
