"Senate Crypto Bill Aims to Divide Digital Assets—SEC vs. CFTC"

U.S. lawmakers continue to push for regulatory clarity in the digital asset space, with key figures in Congress expressing optimism about the prospects of the Responsible Financial Innovation Act, which is expected to define the jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The bill, a Senate counterpart to the House’s Digital Asset Market Clarity (CLARITY) Act, is anticipated to address the evolving landscape of digital assets by establishing a market structure that incorporates modernized disclosure requirements and regulatory oversight [1].

Senator Tim Scott, Chair of the Senate Banking Committee, has emphasized the importance of bipartisan support for the bill, noting that the recent passage of the CLARITY Act in the House with 78 Democratic votes demonstrates growing consensus. Scott has been engaging directly with Democratic members, both within and outside the banking committee, to secure votes for the Senate version. He estimates that between 12 and 18 Democrats may back the bill, acknowledging the complex nature of the legislation and the need for broad support in the chamber [4].

Senator Cynthia Lummis, a key proponent of the bill, recently stated during a conference in Jackson Hole, Wyoming, that a final draft of the legislation will be submitted to President Donald Trump before Thanksgiving, which may occur as early as late November 2025. Lummis emphasized that the Senate Banking Committee aims to pass the bill by the end of September 2025, with the Agriculture Committee expected to review it by the end of October before it is sent to the President. This timeline suggests a more extended process than initially anticipated, but reflects the committee's intent to ensure comprehensive and effective legislation [2].

The proposed framework seeks to classify digital assets into distinct categories—security tokens, commodity tokens, and tokens for commercial and consumer use—to clarify regulatory responsibilities and reduce ambiguity for market participants. According to a recent report by the White House Working Group on Digital Asset Markets, this taxonomy is essential for assigning appropriate regulatory oversight. The SEC would regulate security tokens and tokenized securities, while the CFTC would oversee commodity tokens like Bitcoin and Ether. The report also proposes regulatory relief for certain tokenized securities and safe harbor provisions for non-security digital assets [3].

The legislation also includes provisions for banking institutions, allowing financial holding companies to offer digital asset services under unified segregation and audit standards. It establishes custody requirements for platforms offering both spot and derivatives trading, ensuring consistent oversight between the two primary federal agencies. Additionally, the framework mandates that digital asset issuers provide transparency both before and after a token’s launch, scaling with the token’s market capitalization [4].

As the bill moves through the legislative process, its proponents argue that regulatory clarity is essential to maintaining the United States’ leadership in digital asset innovation and protecting consumers. Critics, however, have raised concerns about industry influence in shaping the legislation and the potential risks of unchecked crypto activity. Senator Elizabeth Warren, the ranking member of the Senate Banking Committee, has called for regulation that limits corruption and protects the broader economy from crypto-related risks. With the Senate set to return from recess on September 2, lawmakers will face increasing pressure to finalize the bill and present a unified regulatory framework to the President [1].

Source:

[1] Senate Banking Committee Chair Support Crypto Market Structure (https://cointelegraph.com/news/senate-banking-committee-chair-support-crypto-market-structure)

[2] Market Structure Bill Will Be Before President Trump Before Thanksgiving Says Sen Lummis (https://www.coindesk.com/policy/2025/08/20/market-structure-bill-will-be-before-president-trump-before-thanksgiving-says-sen-lummis)

[3] United States: The White House Working Group on Digital Asset Markets Report Establishing Clear Regulation Based on a Digital Assets Taxonomy (https://www.investmentlawwatch.com/2025/08/19/united-states-the-white-house-working-group-on-digital-asset-markets-report-establishing-clear-regulation-based-on-a-digital-assets-taxonomy/)

[4] Senate Banking Chairman Tim Scott Predicts Up to 18 Democrats to Break Ranks on Sweeping Crypto Law (https://cryptoslate.com/senate-banking-chairman-tim-scott-predicts-up-to-18-democrats-to-break-ranks-on-sweeping-crypto-law/)