The U.S. Congress has moved a step closer to reshaping crypto regulation. The CLARITY Act (Digital Asset Market Clarity Act of 2025) cleared the House with a bipartisan vote of 294-134, and now shifts to the Senate. If enacted, it would designate the vast majority of crypto assets as commodities under the Commodity Futures Trading Commission (CFTC), sharply reducing the Securities and Exchange Commission (SEC)'s authority.
Legislative Path: Senate Markup, Committee Merge, and Final Signature
The Senate Banking Committee and Agriculture Committee will each review their own versions before merging into a unified draft. White House Crypto Advisor David Sacks, along with Senators Tim Scott and John Boozman, indicated that markup sessions are expected to start this month. If on track, a full Senate vote could conclude by March. Differences between the House and Senate drafts would then be reconciled by a joint committee. The final step—presidential signature—is considered the easiest, and Trump has expressed eagerness. The bill could become law before the August 2026 election cycle if the timeline holds.
Core Provisions: CFTC Expands, SEC Retreats
The CLARITY Act defines digital commodities as digital assets intrinsically linked to blockchain usage, excluding securities, derivatives, and stablecoins. To shift from SEC oversight to CFTC jurisdiction, an asset must meet three conditions: the blockchain and the digital commodity must not be controlled by any person or group; value must primarily derive from blockchain's "use and operation"; and no holder may own more than 20% of the total supply. Assets failing these criteria remain under SEC authority.
A key legal nuance distinguishes "investment contract" from "investment contract asset": digital assets sold via investment contracts are not automatically classified as investment contracts (and thus securities). This directly counters former SEC Chair Gary Gensler's broad claim that all crypto assets are securities. Additionally, Digital Commodity Exchanges, brokers, and dealers must register with the CFTC; revisions to the Bank Holding Company Act will allow qualified banks and financial institutions to operate in digital commodity markets, encouraging corporate crypto adoption.
The SEC retains authority to assess blockchain "maturity," oversee primary market registration exemptions (up to $75 million in sales over 12 months), and set reporting rules for immature systems. This means the SEC still decides the security-or-commodity status of altcoins, but the CFTC gains exclusive jurisdiction over spot and cash markets for digital commodities on mature blockchains.
In the Senate, the bill faces partisan dynamics. If Democrats employ a filibuster, the passage threshold rises from a simple majority (51 votes) to 60 votes. Markets are closely watching markup sessions scheduled for this month.