Toward CLARITY: A New Framework for Digital Assets in the US

Toward CLARITY: A New Framework for Digital Assets in the US

TLDR

Yesterday, lawmakers in the House Financial Services and Agriculture Committees introduced the bipartisan Digital Asset Market Clarity (CLARITY) Act, a sweeping 200-plus page proposal to bring long-awaited regulatory certainty to the US digital asset ecosystem. The bill establishes definitions for digital assets and commodities, creates a new registration regime for cryptocurrency platforms, outlines jurisdictional boundaries between the Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC), and codifies decentralization pathways for crypto networks. The legislation reaffirms the continued application of anti-money laundering (AML) obligations under the Bank Secrecy Act and preserves the US Treasury Department’s role in combating illicit finance. The CLARITY Act represents a significant step toward a tailored, dual-agency framework for overseeing crypto markets while maintaining robust investor protections and national security safeguards.

TRM Labs supports regulators, policymakers, and supervisors globally by providing blockchain intelligence tools that inform licensing, risk assessments, and ongoing supervision of digital asset entities.

Legislative Background

The legislation builds on years of bipartisan legislative and oversight efforts, including the prior introduction and passage of the Financial Innovation and Technology for the 21st Century (FIT21) Act in the 118th Congress. It reflects extensive committee hearings, public roundtables, and cross-agency consultations and seeks to support responsible innovation, investor protection, and regulatory clarity for the digital asset industry.

Definitions and Classifications of Digital Assets

The Act begins by codifying definitions central to digital asset market structure. A “digital asset” is defined as a natively electronic asset recorded on a cryptographically secured distributed ledger, including fungible tokens, payment stablecoins, and other blockchain-native assets.

The legislation creates two primary categories:

• Digital Assets Offered as Part of an Investment Contract: These fall under securities laws and are initially overseen by the SEC.
  
  
• Digital Commodities: These are digital assets that are no longer part of an investment contract and instead meet independence and decentralization criteria. These assets fall under CFTC oversight.
  

Certification of Decentralization and Rebuttable Presumption

To facilitate transition from securities to commodities classification, the Act introduces a “Certification of Decentralization” process. Issuers of digital assets may file a certification with the SEC, asserting that the underlying blockchain network meets established decentralization standards across multiple dimensions, including governance, token distribution, and development control.

Upon filing, the asset receives a rebuttable presumption that it qualifies as a digital commodity. The SEC may rebut the certification under specific evidentiary and procedural guidelines.

Jurisdictional Boundaries Between SEC and CFTC

The CLARITY Act explicitly delineates responsibilities between the SEC and the CFTC:

• The SEC continues regulating digital assets that are part of investment contracts—particularly during fundraising, initial sales, and other capital formation activities.
  
  
• The CFTC gains authority over digital commodities, including those that have completed the decentralization process. The CFTC regulates spot markets, digital commodity exchanges, and post-sale trading.
  

To formalize this split, the Act amends the Securities Exchange Act of 1934 and the Commodity Exchange Act.

Registration of Digital Commodity Exchanges

The bill establishes a new registration category—Digital Commodity Exchanges (DCEXs)—regulated by the CFTC. Entities that facilitate secondary trading of digital commodities must register under this framework and meet robust operational requirements.

These include provisions for:

• Customer asset protection
  
  
• Market transparency and surveillance
  
  
• Disclosure of material risks
  
  
• Listing standards and delisting procedures
  
  
• Governance and internal control mechanisms

Intermediaries, Brokers, and Joint Rulemaking

Entities that operate across both securities and commodities markets—such as custodians, dealers, and brokers—must comply with rules jointly issued by the SEC and CFTC. These rules will address capital adequacy, disclosure, risk management, and investor protection in a harmonized manner.

The Act encourages interagency collaboration to avoid conflicting compliance mandates and to promote regulatory efficiency across asset classifications.

Public Transparency and Decentralization Metrics Guide

The SEC is required to issue and maintain a “Decentralization Metrics Guide”, a publicly accessible document detailing how the agency assesses whether a network is sufficiently decentralized. This initiative is intended to guide developers and issuers in shaping compliant blockchain protocols and token launch models.

Treatment of Payment Stablecoins

The CLARITY Act does not directly regulate payment stablecoins. Instead, it explicitly excludes them from the bill’s scope, signaling that these instruments will be addressed in the stablecoin legislation now moving through both the Senate and House of Representatives.

This carve-out acknowledges that stablecoins, as dollar-pegged instruments, may require bespoke regulatory treatment beyond the securities-commodities framework.

Transition Periods and Grandfathering

Recognizing the complexity of compliance for legacy systems, the bill includes transition timelines and grandfathering provisions. These mechanisms ensure that entities and token projects operating before the Act’s enactment will have time to adapt to the new legal environment without facing abrupt enforcement actions.

Anti-Money Laundering, FinCEN, and Treasury Oversight

Section 403 of the CLARITY Act makes clear that the legislation does not supersede or alter obligations under the Bank Secrecy Act (BSA) or related Treasury regulations. Specifically:

• All registered entities—whether under the SEC or CFTC—must maintain AML programs, including internal controls, employee training, recordkeeping, and suspicious activity reporting.
  
  
• The US Department of the Treasury retains authority to issue rules, guidance, and interpretations to ensure the BSA’s full applicability to digital asset intermediaries.
  
  
• The bill affirms FinCEN’s jurisdiction and its ability to coordinate with market regulators, facilitating joint supervision, information sharing, and consistent enforcement of AML obligations.
  
  
• Treasury may impose additional requirements under Section 311 of the USA PATRIOT Act, geographic targeting orders, or other authorities in cases involving illicit finance risk, including sanctions evasion or ransomware.

TRM’s Role in Global Regulatory Collaboration

The CLARITY Act represents a significant legislative effort to codify a comprehensive and functional regulatory framework for the digital asset ecosystem in the United States. It balances innovation with consumer protection, fosters transparency in network development, and aligns anti-money laundering oversight with existing legal mandates by reinforcing the jurisdiction of both the SEC and CFTC while preserving the foundational authority of the BSA and the US Treasury. 

As regulatory frameworks like CLARITY emerge globally, TRM Labs works hand-in-hand with regulators, policymakers, and supervisors to build safe, transparent digital asset ecosystems. TRM’s blockchain intelligence platform supports financial intelligence units, securities regulators, and central banks in licensing determinations, risk assessments, and the ongoing supervision of registered entities—helping ensure the promise of crypto is realized without compromising financial integrity or national security.