U.S. Aims to Solve Crypto's Regulatory Maze with New Framework

A proposed U.S. Senate bill aims to reshape the regulatory framework for digital assets by addressing key concerns raised by developers and industry stakeholders. The Digital Asset Market Clarity Act of 2025—also known as the CLARITY Act—was passed in the House with strong bipartisan support and is now under consideration in the Senate. The bill is intended to clarify jurisdictional responsibilities among regulators and ensure legal certainty for software developers and non-custodial service providers in the digital asset space. Industry groups, including the DeFi Education Fund, have called for explicit federal protections for developers and infrastructure builders, emphasizing the need to avoid imposing traditional financial regulations on blockchain technology. This push is part of a broader effort to position the United States as the “crypto capital of the world” by fostering innovation and investment in digital assets [1].

One of the key objectives of the CLARITY Act is to resolve the regulatory overlap between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Under the proposed legislation, the CFTC would assume primary responsibility for regulating digital commodities, including spot markets, while the SEC would retain oversight in specific cases, such as permitted payment stablecoins. This restructuring aims to address the long-standing regulatory turf war that has created uncertainty for market participants. The bill also includes provisions to exempt certain digital assets from being classified as “investment contracts” under the SEC’s Howey test, thereby reducing the regulatory burden on secondary market transactions and expanding the scope of non-registered digital assets [1].

In addition to clarifying jurisdictional boundaries, the CLARITY Act introduces new regulatory categories, such as “Qualified Digital Asset Custodians,” which would be subject to oversight by the CFTC. These entities are designed to hold digital assets on behalf of registered individuals or organizations, further reinforcing the separation between custodial and non-custodial service providers. The bill also seeks to protect developers from being misclassified as operators of “money transmitting businesses,” a regulatory category that imposes strict compliance obligations and may hinder innovation. Developers are requesting that the final version of the CLARITY Act include robust protections that prevent them from being held liable for criminal activities conducted through their software or platforms [1].

The Senate is currently considering a parallel bill, the Responsible Financial Innovation Act of 2025, introduced by Senators Tim Scott, Cynthia Lummis, Bill Hagerty, and Bernie Moreno. This draft aims to expand on the CLARITY Act by reinforcing concepts such as investor protection and regulatory clarity while encouraging innovation in the digital asset space. Among its provisions is a proposal to define “ancillary assets” to clarify which digital assets are not securities and to require the SEC to exempt certain offers or sales from registration requirements. The bill also calls for the SEC to update its regulatory framework to better reflect the unique technological characteristics of digital assets [1].

The digital asset industry has shown strong support for these legislative efforts, with major players such as a16z crypto, Chainlink Labs, Coinbase, and Uniswap Labs signing a joint letter urging lawmakers to adopt clear and consistent regulations. The letter highlights the importance of preserving historical protections for open-source software development and ensuring that software developers are not unfairly burdened by regulatory requirements designed for the traditional financial sector. The industry advocates argue that such clarity will not only protect developers but also encourage further investment and innovation in the U.S. digital asset ecosystem [1].

Source: [1] US Congress urged to protect developers in market structure bill (https://coingeek.com/us-congress-urged-to-protect-developers-in-market-structure-bill/)