U.S. Senate Seeks Regulatory Clarity for Crypto’s Split Identity

The U.S. Senate has advanced a legislative proposal that would establish a joint advisory committee between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to oversee digital assets. The draft bill, known as the Responsible Financial Innovation Act of 2025, represents a key step in clarifying regulatory oversight for the crypto market. The proposed committee will consist of non-government members from the industry, academia, and user communities, with the goal of fostering collaboration and providing nonbinding recommendations on regulatory frameworks [1].

The bill also outlines a regulatory framework distinguishing between digital assets governed by the SEC and those under the CFTC’s jurisdiction. This distinction is critical for aligning oversight with the nature of the assets—securities versus commodities. A central component of the legislation is its focus on tokenized assets, ensuring that tokenized stocks remain classified as securities to avoid confusion with commodity regulations. This clarification is particularly important for digital asset firms seeking to integrate tokenized assets into existing financial infrastructure such as broker-dealer systems and trading platforms [1].

Beyond regulatory oversight, the legislation includes several provisions aimed at addressing industry concerns. For instance, it shields software developers and non-custodial service providers from being misclassified as financial institutions under existing securities laws. This comes in response to a coalition of over 112 crypto companies, investors, and advocacy groups that urged the Senate to include such protections. The coalition warned that outdated financial rules could stifle innovation and potentially drive developers away from the U.S. market [1]. According to data cited in a letter to the Senate Banking and Agriculture Committees, the U.S. share of open-source blockchain developers has dropped from 25% in 2021 to 18% in 2025 [1].

Another key element of the bill is the treatment of digital commodities in bankruptcy proceedings. The proposed legislation would amend existing bankruptcy laws to treat digital commodities and ancillary assets similarly to cash and traditional securities. This change would ensure that customer claims during a firm’s bankruptcy are not limited to conventional assets but would also include crypto-related digital property [1].

The bill also includes exemptions for specific crypto activities, such as staking, airdrops, and decentralized infrastructure projects (DePIN). These exemptions align with the SEC’s guidance that such activities should not be classified as securities, and they reflect ongoing efforts to prevent regulatory overreach and maintain a level playing field for innovation [4]. Additionally, the bill aims to protect non-fungible tokens (NFTs), clarifying that NFTs representing art, collectibles, or memberships are not securities merely because they can be resold or appreciate in value [3].

The legislative process for the Responsible Financial Innovation Act is expected to continue with a Senate Banking Committee vote on SEC-related provisions in the coming weeks. A follow-up vote on CFTC oversight is anticipated by the Senate Agriculture Committee in October, with a full Senate vote potentially occurring as early as November [1]. While the bill has yet to secure bipartisan support, ongoing negotiations between Democrats and Republicans aim to address remaining concerns and build consensus. The final passage of the bill would require a 60-vote threshold in the Senate, a challenge that Republican leaders are working to overcome through cross-party collaboration [2].

As the U.S. continues to shape its crypto regulatory landscape, the bill represents a significant step toward providing clarity and structure to an industry that has long operated in a regulatory gray area. The joint advisory committee proposed in the legislation could play a vital role in ensuring that regulatory efforts keep pace with technological advancements and market dynamics [3].

Source:

[1] Senate crypto bill adds clause to keep tokenized stocks ... (https://cointelegraph.com/news/senate-crypto-bill-tokenized-securities-clarification)

[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] Crypto Regulation: US Senate Banking Updated Market ... (https://bitcoinist.com/crypto-regulation-senate-updated-market-structure/)

[4] Senate Banking Committee Releases Updated Draft ... (https://coingape.com/senate-releases-updated-draft-crypto-market-structure-bill/)