SEC vs CFTC: Who does the "CLARITY Act" want to give the power to control the crypto world?

Written by: Cointelegraph

Translated by: AididiaoJP, Foresight News

The “CLARITY Act” proposes a clear division of responsibilities between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), aiming to clarify how digital assets, exchanges, disclosures, and regulation should operate in the U.S. cryptocurrency market.

Key Points

Clarifying Definitions and Responsibilities: The bill aims to resolve long-standing regulatory uncertainties with a clear framework, defining what constitutes a digital asset, the roles of intermediaries, and what information needs to be disclosed.

CFTC and SEC Each Play Their Part: Most spot trading of qualified tokens will fall under CFTC regulation, while the SEC will continue to oversee primary market issuance, disclosures, and investor protection.

Regulating Both Assets and Conduct: The bill not only focuses on the assets themselves but also emphasizes market conduct, establishing registration and behavioral standards for exchanges, brokers, and traders to enhance market integrity and transparency.

Complementing the Stablecoin Bill: The Stablecoin Bill, primarily governed by the “GENIUS Act,” addresses stablecoins, while the “CLARITY Act” will serve as a supplement, especially regarding disclosures and incentives related to stablecoins.

The “CLARITY Act” (2025 Digital Asset Market Clarity Act) seeks to break the legislative deadlock in the industry through a dual approach: defining digital assets and allocating regulatory authority based on their actual market functions. This legislation aims to shift away from case-by-case enforcement toward a comprehensive framework for asset classification, intermediary roles, and mandatory disclosures.

This article explains what the “CLARITY Act” is, why it matters, outlines its goals, and discusses how it plans to regulate stablecoins. It also covers the concept of mature blockchains, main arguments against the bill, and its legislative progress.

Why the “CLARITY Act” Matters

The “CLARITY Act” addresses a longstanding challenge in the crypto space: regulatory uncertainty.

For years, digital asset companies have faced confusion over jurisdiction between the SEC and CFTC. The SEC often considers many tokens as securities, while the CFTC classifies them as commodities. This ambiguity has slowed innovation, complicated compliance, confused investors, and caused headaches for crypto businesses.

The goal of the “CLARITY Act” is to break this deadlock by clearly defining digital assets and assigning regulatory responsibilities based on asset type and related activities. With a predefined, clear framework, market participants will know from the outset what rules to follow, rather than facing uncertainty from enforcement actions.

Main Goals of the “CLARITY Act”

The bill aims to establish a regulatory system primarily through three approaches:

More Precise Asset Classification

The “CLARITY Act” introduces the concept of “digital commodities,” referring to digital assets whose value mainly derives from their underlying blockchain system. This definition excludes traditional securities and stablecoins. As a result, spot trading of many qualifying tokens will fall under CFTC regulation. The definition emphasizes the functionality of the blockchain and the level of decentralization of the network.

Clarifying Regulatory Boundaries

The bill delineates regulatory authority by function:

• CFTC gains primary authority over digital commodity trading, especially in secondary markets, spot markets, and trading platforms.

• The SEC retains authority over primary issuance, investor protection, necessary disclosures, and initial sales.

The bill also encourages joint rulemaking in overlapping areas like disclosures.

Establishing Unified Disclosure and Conduct Standards

To protect investors and ensure market fairness, the bill requires developers and issuers to provide standardized disclosures covering blockchain technology details, tokenomics, and key risks, enabling market participants to compare projects effectively. Intermediaries such as digital asset exchanges, brokers, and traders will also need to meet registration, reporting, and regulatory requirements, with CFTC primarily overseeing trading-related activities.

Overall, the “CLARITY Act” seeks to replace vague regulations with clear rules, protecting investors and maintaining market integrity while supporting industry innovation.

The debate over the structure of the cryptocurrency market is influencing policymakers’ thinking on how to regulate AI models, as both involve issues of responsibility and rapid innovation.

How the “CLARITY Act” Regulates Stablecoins

The “GENIUS Act,” passed in 2025, established a federal regulatory framework for payment stablecoins. It states that compliant stablecoins, meeting strict reserve, redemption, and regulatory requirements, will not be classified as securities or commodities.

The “CLARITY Act” does not duplicate or overlap with this stablecoin regulation. Instead, its provisions will serve as a supplement, especially regarding incentives, disclosures, and how stablecoins interact with the broader digital asset market.

On “Mature” Blockchains

Given that assets evolve, the “CLARITY Act” sets a pathway for blockchains to be recognized as “mature” once they meet certain standards of decentralization and functionality.

Once deemed “mature,” related tokens will be classified as “digital commodities” and regulated by the CFTC. Meeting other conditions could significantly reduce regulatory burdens, such as potentially eliminating the need for registration.

The concept of “mature blockchain” reflects the idea that as networks become more decentralized and widely distributed, their regulatory approach should adapt accordingly. It provides projects with a clearer path forward, potentially allowing for more relaxed compliance in the future.

In past regulatory disputes, courts have sometimes relied on decades-old securities law precedents to determine the nature of crypto tokens, highlighting how existing legal frameworks are being applied to this new digital market.

Ongoing Criticisms of the “CLARITY Act”

While the bill aims to bring clarity, criticisms remain. Some argue its definitions may still have loopholes, especially in DeFi projects, which are often difficult to fit into traditional regulatory categories.

Others believe the investor protections offered are weaker than current securities law standards. Concerns also exist about overlapping jurisdiction, such as how SEC anti-fraud powers will apply in areas primarily overseen by the CFTC, especially for tokens with multiple characteristics.

Legislative Progress of the “CLARITY Act”

The U.S. House of Representatives passed the “CLARITY Act” (H.R. 3633) in July 2025 with bipartisan support. As of January 2026, the bill is awaiting action in the Senate, having been referred to the Senate Banking, Housing, and Urban Affairs Committee. The legislative process also involves input from the Senate Agriculture, Nutrition, and Forestry Committee regarding CFTC regulation.

By January 2026, Senate committees had held hearings, issued discussion drafts, proposed amendments, and advanced some versions of broader market structure legislation. However, due to disagreements over stablecoin yields and investor protections, revisions and delays have occurred. Coordination between the Senate and House versions is ongoing, and the Senate has yet to hold a final vote.

If ultimately enacted in a coordinated manner, the “CLARITY Act” will become the first comprehensive federal legal framework for the digital asset market structure in the U.S.

Some blockchain networks now publish real-time transparency dashboards showing validator concentration, token circulation velocity, and governance participation. Regulators sometimes reference this data when assessing whether a network is “sufficiently decentralized.”

How to View the “CLARITY Act” Blueprint

The core of the “CLARITY Act” is to address a major longstanding issue in crypto: unclear regulatory boundaries, which hinder innovation and lead to reactive enforcement rather than proactive compliance.

By clarifying asset categories, mandating uniform disclosures, and delineating SEC and CFTC responsibilities, the bill aims to create a more predictable regulatory environment, enabling market participants to understand their obligations from the start.

Of course, legislation is only the first step. How it is implemented, the development of detailed rules, and future adjustments will determine its actual impact. Whether the “CLARITY Act” can deliver the promised clarity will significantly influence the future of U.S. crypto policy and industry competitiveness over the coming years.