CLARITY Act May Finally End Regulatory Uncertainty for U.S. Digital Asset Markets

U.S. lawmakers have unveiled a bipartisan bill that could finally bring long-awaited regulatory clarity to the digital asset market. The Digital Asset Market Clarity Act of 2025 (CLARITY Act), introduced on May 29 by Representative French Hill and backed by three Democratic co-sponsors, proposes a clear division of responsibilities between the SEC and CFTC, aiming to streamline oversight, protect consumers, and support innovation in the crypto space.

• The CLARITY Act aims to resolve long-standing jurisdictional confusion between the SEC and CFTC
• Developers will face new transparency rules requiring detailed disclosures about project operations and ownership
• Brokers and dealers must adhere to stricter customer protection and fund segregation standards

The introduction of the CLARITY Act represents a significant turning point in the United States’ approach to digital asset regulation. For years, the U.S. crypto sector has been caught in a regulatory gray zone, with overlapping enforcement actions and mixed signals from different agencies. The CLARITY Act directly addresses this confusion by clearly defining which digital assets fall under the jurisdiction of the Securities and Exchange Commission (SEC) and which are overseen by the Commodity Futures Trading Commission (CFTC). By doing so, it aims to foster a more predictable and innovation-friendly legal environment for developers, investors, and institutions alike.

In addition to delineating regulatory oversight, the bill introduces important compliance requirements for both developers and intermediaries. Developers will be required to disclose critical information about a project’s ownership, operational framework, and governance, helping to establish transparency in an industry often criticized for its opacity. Customer-facing firms such as brokers and dealers will need to implement robust measures to protect user funds, including separating client assets from company holdings, disclosing potential risks and fees, and adhering to operational standards that minimize conflicts of interest. These provisions are designed to build trust in digital financial services and reduce systemic risk.

Importantly, the CLARITY Act does not stand in isolation. It is part of a broader legislative push by the U.S. government to establish a comprehensive digital asset framework. Parallel to the CLARITY Act, lawmakers have also introduced the Giving Enhanced Numbers to Investors Using Stablecoins, GENIUS Act, which focuses on regulating stablecoins and ensuring they meet stringent standards for reserves, audits, and consumer protection. Together, these bills reflect a growing consensus in Washington: digital assets are here to stay, and a clear, enforceable regulatory architecture is needed to support their responsible growth.

The CLARITY Act, paired with measures like the GENIUS Act, represents a multi-pronged approach to crypto legislation that not only supports innovation but also emphasizes consumer trust, financial integrity, and regulatory certainty. It signals a maturing policy stance where lawmakers are not just reacting to crypto’s volatility, but proactively shaping its future through structured, bipartisan efforts.

Experts see bipartisan collaboration as a strong sign that crypto regulation is finally gaining traction in Congress. While previous attempts to regulate the space often stalled due to political gridlock, the cross-party support behind the CLARITY Act could provide the legislative stability the industry has long awaited. By aligning the regulatory environment with market realities, lawmakers hope to foster a climate of innovation that keeps the U.S. competitive in the global blockchain economy.

What Lawmakers and Experts Are Saying

“Our bill brings long-overdue clarity to the digital asset ecosystem, prioritizes consumer protection and American innovation,” said Representative French Hill, the lead sponsor of the bill. “We’re building on the momentum from the 118th Congress to deliver rules that work.” - Source

FAQs

What is the CLARITY Act of 2025?
The CLARITY Act is a bipartisan U.S. bill that proposes a structured regulatory framework for digital assets, clarifying whether the SEC or CFTC has oversight over different asset types.

How will the CLARITY Act impact crypto developers?
It mandates that developers provide clear disclosures about project operations, governance, and ownership to promote transparency and accountability.

Why does the U.S. need a digital asset framework?
A clear framework can eliminate regulatory ambiguity, protect investors, and prevent crypto innovation from moving offshore due to unclear legal standards.

Who supports the CLARITY Act?
Introduced by Rep. French Hill, the bill is backed by both Republicans and Democrats, including three Democratic co-sponsors, indicating strong bipartisan consensus.

What changes will crypto exchanges and brokers face?
They will need to implement consumer protection measures such as segregating customer funds, providing full disclosures, and registering with appropriate agencies.