Senate Bill Aims to Solve Crypto's Regulatory Riddle

The U.S. Senate Banking Committee finalized a revised version of the Responsible Financial Innovation Act of 2025 on September 5, 2025, introducing key provisions aimed at clarifying the regulatory landscape for digital assets. The updated bill, which spans 182 pages, emphasizes cooperation between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in overseeing the crypto market. It includes a section titled “Protecting Software Developers and Software Innovation,” a provision notably absent in the House’s CLARITY Act [1]. The Senate’s version seeks to exclude certain actors, such as validators, from securities laws and anti-money laundering compliance requirements [1]. Additionally, it explicitly states that the offering or transfer of non-fungible tokens (NFTs) does not constitute a securities offering or sale [1]. This draft, which expands significantly from the original 35-page version introduced in July, outlines how the SEC and CFTC should collaborate in defining and regulating digital commodities [1]. Lawmakers, led by Senate Banking Committee Chair Tim Scott and Ranking Member Cynthia Lummis, aim to unify the House and Senate versions into a single bill by November 2025, with aspirations of having it on President Donald Trump’s desk by Thanksgiving [1]. The House passed its version of the bill, the CLARITY Act, with 294 votes in July, indicating strong bipartisan support [1]. This legislative progress follows a joint statement released by the SEC and CFTC staff on September 2, 2025, which affirmed that regulated exchanges can facilitate spot trading of certain crypto assets [4]. The statement, part of the SEC’s “Project Crypto” and the CFTC’s “Crypto Sprint,” is intended to foster innovation within the U.S. regulatory framework while ensuring investor protection [4]. SEC Chair Paul Atkins and CFTC Acting Chair Caroline Pham emphasized that this collaboration marks a “new beginning” for the two agencies, aiming to leverage the U.S.’s regulatory structure into a competitive advantage for market participants [1]. The Senate’s revised bill also introduces a new provision to prevent tokenized stocks and other securities from being treated as commodities [3]. This clarification aligns with broader legislative efforts to determine the appropriate regulatory authority for different types of digital assets. The bill reflects feedback from industry stakeholders and includes provisions for how bankruptcy procedures should handle “ancillary assets” and digital commodities [2]. The Senate Banking Committee’s draft has yet to secure support from Democrats, but bipartisan discussions are ongoing to ensure key provisions are agreed upon [3]. To pass, the bill will require at least 60 votes in the Senate. If successful, it will then proceed to the House for final approval, a step expected to be relatively straightforward given the CLARITY Act’s broad support [2]. The updated market structure bill is a pivotal step in shaping the regulatory landscape for crypto markets in the U.S., aiming to provide clarity while encouraging innovation and protecting investors [1]. Source: [1] Senate Banking Committee finalizes updated market ... (https://blockworks.co/news/senate-crypto-market-structure-bill) [2] Legislation Steering U.S. Fate of Crypto Emerges in New ... (https://www.coindesk.com/policy/2025/09/05/legislation-steering-u-s-fate-of-crypto-emerges-in-new-version-in-senate) [3] Senate seeks to rein in stock tokenization in latest crypto ... (https://www.cnbc.com/2025/09/05/senate-stock-tokenization-crypto-bill.html) [4] SEC and CFTC staff clear path for spot crypto trading on ... (https://www.aoshearman.com/en/insights/ao-shearman-on-fintech-and-digital-assets/sec-and-cftc-staff-clear-path-for-spot-crypto-trading-on-regulated-exchanges)