CLARITY Act Definition

The CLARITY Act, formally the Digital Asset Market Clarity Act of 2025 and introduced as H.R. 3633, is a U.S. House bill that lays out a federal rulebook for digital assets. It splits responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), defines core asset categories, and sets obligations for trading platforms and brokers. On June 23, 2025, the bill was reported out of the House Financial Services and Agriculture Committees, and on July 17, 2025 the House passed it with bipartisan support, sending it to the Senate Banking Committee.

Purpose and scope

The bill tries to replace case-by-case enforcement with a consistent framework for tokens, secondary trading, custody, and market structure. It aims to reduce uncertainty by clarifying who regulates what and by creating disclosure and conduct standards tailored to crypto markets. 

Key definitions

The act uses a three-part taxonomy:

• Digital commodities are digital assets whose value is tied to how a blockchain is used and operates. Securities, derivatives, and stablecoins do not fall under this definition. 
• Investment contract assets cover tokens sold in fundraising transactions that look like securities offerings. The act distinguishes the token from the investment contract itself, which affects how secondary trading is treated. 
• Permitted payment stablecoins are addressed in parallel through stablecoin legislation, while the CLARITY Act focuses on market structure and non-stablecoin token treatment.

SEC and CFTC roles

Under the bill, the SEC keeps authority over primary market fundraising that involves investment contracts, along with related disclosure and offering requirements. The CFTC gains exclusive jurisdiction over digital commodity transactions on registered intermediaries, including cash and spot markets. This arrangement also allows certain SEC-registered venues to handle digital commodities, with coordination between the agencies on overlapping activities. 

Exchanges and intermediaries

Centralized platforms that list or broker digital commodities would have to register with the CFTC as digital commodity exchanges or as brokers and dealers. They must follow “core principles,” such as surveillance, recordkeeping, segregation of customer assets, conflict controls, and public listing information that includes source code, transaction history, and economic design. Proprietary trading is restricted, and customer asset commingling is generally prohibited. The bill also sets up provisional registration while the full regime comes online.

Maturity and “mature blockchains”

A central idea is blockchain maturity. An issuer can certify to the SEC that its blockchain is not controlled by any single person or coordinated group, and that value mainly comes from the network’s use rather than insider control. Ownership concentration by certain holders must be below specified thresholds, including a 20 percent limit noted in analyses of the bill’s text. Some exemptions and exchange listing permissions hinge on this maturity concept. 

Fundraising and exemptions

For fundraising tied to digital commodities on mature blockchains, the act creates a limited exemption from registration under the Securities Act, subject to conditions such as filing an offering statement and a cap on sales proceeds within a 12-month period. The SEC is directed to write rules on timelines and on what happens if a project does not reach maturity. 

Treatment of decentralized finance and wallets

Activities that are truly decentralized and not acting as intermediaries fall outside the exchange and broker registration parts of the bill. Anti-fraud and anti-manipulation authority still applies. The act also contemplates coordination so that SEC-registered broker-dealers and alternative trading systems can handle digital commodities without unnecessary duplication.

Relationship to other U.S. proposals

Commentary connects the CLARITY Act to earlier market-structure debates and to a stablecoin bill, the GENIUS Act, which the House passed in July 2025. Some explainers also frame it as a follow-on to House work around FIT21, which sought broad crypto market rules in the previous Congress.

Legislative status and next steps

After House passage on July 17, 2025, the bill moved to the Senate Banking Committee. Senators meanwhile released a discussion draft of the Responsible Financial Innovation Act of 2025, a competing approach that emphasizes SEC authority and the concept of “ancillary assets.” The two Senate committees that oversee securities and commodities would need to coordinate if they choose to merge approaches.

Reception and critiques

Supporters say the act finally draws bright lines for token classification and market oversight. Critics worry that definitions may still leave gray areas and that some protections for older token distributions could be pulled back. Industry commentary also flags how much discretion the agencies will retain during implementation. 

International context

Because many global firms serve U.S. users or rely on U.S. capital markets, a clear U.S. framework would likely shape compliance strategies worldwide. Analysts often compare the act’s direction with Europe’s MiCA regime and recent U.K. steps on crypto market rules, noting that large jurisdictions are building interoperable, though not identical, playbooks.

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