CLARITY Act Passes House Committees, Shaping US Crypto Regulation

The US CLARITY Act has swiftly passed through two influential House committees, the Agriculture and Financial Services committees, with votes of 47-6 and 32-19 respectively. This bipartisan progress has sparked significant interest within the crypto industry, raising questions about the bill's contents and potential implications for digital assets in the United States.

The CLARITY Act aims to clarify the regulatory responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The bill assigns the CFTC primary oversight over digital commodities such as Bitcoin and Ethereum, mandating that exchanges register and adhere to anti-fraud, custody, and segregation rules. Meanwhile, the SEC will retain jurisdiction over tokens sold as part of investment contracts, with a new "Certification of Decentralization" process that could reclassify certain tokens as commodities if the blockchain is sufficiently decentralized.

The bill also establishes Digital Commodity Exchanges (DCEXs) under CFTC oversight, with stringent registration and operational standards. Stablecoins are excluded from the bill's scope, awaiting separate legislation, while anti-money laundering (AML) obligations are reinforced. However, a recent amendment introduces a "Gensler-era" provision that grants the SEC broad authority to re-examine and potentially reclassify tokens as securities, even those already in circulation. This provision has raised concerns about reintroducing regulatory uncertainty, reminiscent of past SEC actions on Ethereum and Ripple.

Despite these concerns, the bill includes the Blockchain Regulatory Certainty Act (BRCA), which protects developers of non-custodial blockchain infrastructure from being treated as financial intermediaries. This addition has garnered support from eight major crypto firms, including Uniswap, who view it as a victory for US innovation. Both House committees must now consolidate their amendments into a single version before the full House can vote, a process that could bring further changes. The Senate is also preparing its own version of the bill, with Senator Cynthia Lummis advocating for a bipartisan, bicameral approach that mirrors the House bill. Additionally, the Senate is close to voting on the GENIUS Act, a stablecoin bill that could pass soon.

The CLARITY Act is often compared to the EU’s MiCA regime, which establishes strict, unified rules for crypto assets, stablecoins, and service providers across Europe. While MiCA emphasizes transparency, stability, and consumer protection, the CLARITY Act focuses more on jurisdictional clarity and market structure. Critics, however, worry that the CLARITY Act may leave too many tokens unregulated or subject to agency discretion.

Crypto lobbyists and traditional finance groups are actively engaging to shape the final bill. Democrats express concerns that the current draft could expose consumers to risks, while Republicans argue that it will foster US innovation and maintain competitiveness. The inclusion of DeFi protections is seen as a positive development, but the SEC’s expanded powers remain a contentious issue.

In summary, the CLARITY Act's bipartisan momentum is evident, but the details are still evolving. With the Senate preparing its own version and industry voices calling for changes, the coming weeks will be crucial in determining whether the US finally achieves the crypto regulations it needs or faces more uncertainty.