Key Takeaways

• CLARITY introduces the first unified legal structure for U.S. digital assets, expanding groundwork set by the GENIUS Act.
  
• Stablecoins gain a statutory base, while broader digital markets receive a clear classification system with defined authority across agencies.
  
• Washington moves from fragmented enforcement into a codified framework built for institutional entry, scale, and long-range development.
  
• 2025 becomes a turning point as Congress, the SEC, and the CFTC align behind market-structure reform.
  
• A decade-long question, securities or commodities, finally receives a definitive legal answer, shaping the next era for U.S. digital markets.
  
• Clear rules position the United States for renewed leadership in global digital-asset regulation and capital formation.

For nearly a decade, the U.S. crypto sector moved through persistent regulatory fog where no firm line separated securities and commodities. Uncertainty consistently slowed innovation, pushed founders overseas, and redirected capital toward Singapore, Dubai, and Switzerland. Momentum now shifts in a decisive way.

On December 10, 2025, during the Blockchain Association Policy Summit in Washington D.C., Senators Kirsten Gillibrand and Cynthia Lummis delivered a pivotal announcement. The draft Cryptocurrency Market Structure Act, known as the CLARITY Act, will surface this weekend and enter Senate amendments and hearings immediately afterward.

Are crypto assets securities or commodities? Who gains authority, the SEC or the CFTC? Simple questions on the surface, yet each one created an Achilles heel for the sector and shaped ten years of uncertainty across U.S. digital markets.

Part I: A Historic Turning Point for the U.S. Cryptocurrency Industry

To understand the weight of this moment, it helps to look at the decade that led into it. For years, the SEC and CFTC issued guidance, launched enforcement actions, and pressed for jurisdiction across digital assets. No unified rulebook emerged, so litigation gradually filled the vacuum. Many industry voices began referring to this era as “regulation by enforcement,” a period where court decisions, not Congress, shaped market boundaries.

Arnold & Porter described the impact in clear terms, noting that this environment created “legal uncertainty, constrained the participation of traditional financial institutions, and pushed innovation abroad.” As pressure intensified, Congress stepped in more actively, aiming to replace scattered agency actions with a coherent legal structure.

“This bill marks a significant turning point for the development, operation, and regulation of cryptocurrency in the United States. It attempts to provide legal certainty around token classification, capital raising, and post-sale treatment – something the industry has long sought, while reducing the risk of regulation by enforcement.”
— Arnold & Porter, “Clarifying the CLARITY Act” Analysis Report, August 2025

Momentum then accelerated. On July 17, 2025, during Congress’s “Crypto Week,” the House advanced the CLARITY Act with a strong 294–134 vote. Support came from 216 Republicans and 78 Democrats, a larger coalition than the earlier FIT21 effort. For many lobbyists, this surge in bipartisan alignment signals rising pressure on the Senate to act without delay.

Part II: Senator Lummis – “The Largest Crypto Law in U.S. History”

Senator Cynthia Lummis, Chair for the Senate Banking Committee’s Digital Assets panel and a central force in congressional work on digital markets, presents the CLARITY Act as “the largest crypto law in U.S. history.” Her message stays consistent: GENIUS covered stablecoins, while CLARITY reaches across the full digital-asset landscape.

“The uncertainty around digital asset regulation is finally being addressed. The draft strikes a thoughtful balance between offering regulatory clarity for innovators and safeguarding consumer interests. Market structure legislation will establish clear distinctions between digital asset securities and commodities, modernize our regulatory framework, and position the United States as the global leader in digital asset innovation.”
— Senator Cynthia Lummis, Official Statement, November 2025

Lummis details steady progress through daily sessions with Democratic lawmakers, pushing for broad alignment before any committee vote. She stresses a key point: CLARITY spans nearly every digital asset, so each section requires joint review and unified language.

Negotiations hit turbulence once DeFi-related documents surfaced publicly and lobbyists shifted into open criticism during sensitive talks. Pace slowed, yet core momentum held firm.

Lummis keeps her target clear. Committee action lands before year-end, followed by Senate debate early next year. During the Wyoming Blockchain Symposium in August, she stated:

“We will have a market structure for the President’s desk before the end of this year. I hope it’s before Thanksgiving. So that’s our goal, we think we’ll use the House Clarity Act as the base bill. We use as much of the changes that the House wants to the stablecoin bill and how they put in the Clarity Act. We want to try and keep those so that we honor the House’s work.”
— Senator Cynthia Lummis, Wyoming Blockchain Symposium, August 2025

Lummis’s team also signals strong respect for House work, aiming to retain substantial sections while refining specific elements. Priority stays fixed on one objective: preserve bipartisan strength, including support from 78 Democrats, and move CLARITY forward without losing coalition stability.

Part III: Core Design of the CLARITY Act – Classification Rather Than “One Size Fits All”

CLARITY aims to end a decade-long clash between regulators and industry by drawing firm boundaries for digital assets. Legislation introduces a structured framework built on economic traits within each asset class, instead of a single rule for every token.

Legal Distinction Between “Digital Commodities” and “Digital Securities”

Legislation places most tokens on decentralized networks under “digital commodity” status, granting primary oversight to the CFTC. Tokens meeting the Howey criteria with clear investment-contract features remain under SEC supervision. Paul Hastings LLP highlights this shift as a major move away from earlier proposals.

Momentum continued on November 10, 2025, when the Senate Agriculture Committee released a bipartisan draft crafted by Chairman John Boozman and Senator Cory Booker. Language in the draft expands CFTC authority to supervise spot markets for digital commodities, including Bitcoin and Ethereum.

“The CFTC plays a critical role in maintaining the integrity and stability of our financial and derivatives markets. As Congress works to expand authority for the commission to oversee the trading of digital assets that are commodities, it’s essential that we also ensure it has the tools, personnel and resources necessary to carry out this new mission, along with its current responsibilities.”
— Chairman John Boozman, November 2025

Exemption Pathway for “Mature Blockchains”

CLARITY introduces a “mature blockchain system” category to prevent automatic assignment into securities rules. A network enters this category once decentralization crosses clear thresholds: no entity holds more than 20 percent in supply or validator rights, and price formation leans on active network usage rather than managerial action.

This pathway creates regulatory stability for leading networks including Bitcoin and Ethereum, yet analysts still warn about long-term challenges. Brookings Institution voices concern around structural tension between digital-asset rules and legacy securities frameworks:

“The danger in current market-structure proposals is the way they try to provide clarity in the classification of digital assets. The approach is likely to undermine existing frameworks for securities and commodities regulation. The first objective should be to create federal regulation for the ‘spot market’ in digital assets that are not securities. Pending proposals assign that task to the CFTC, but it would be best to involve the SEC as well.”
— Timothy G. Massad, Former CFTC Chair, November 2025

Limited Exemptions and a Provisional Registration Window

Issuers conducting ICOs on mature networks may request exemptions from registration under the Securities Act of 1933, with strict limits. Annual fundraising cannot exceed 75 million USD, and issuers must deliver extensive disclosures to meet investor-protection standards.

CLARITY also directs all venues facilitating spot or derivatives activity for digital commodities to register with the CFTC as a Digital Commodity Exchange, broker, or dealer. A 360-day provisional window smooths the transition, giving established platforms time to adapt without immediate disruption.

Legislative work in Congress now runs parallel with sweeping changes inside the SEC under Chairman Paul Atkins. On July 31, 2025, during an address at the America First Policy Institute in Washington D.C., Atkins introduced “Project Crypto,” a broad initiative designed to modernize securities rules and advance President Trump’s plan for the United States to emerge as a global center for digital-asset innovation.

Momentum increased on November 12, 2025, when Atkins delivered a landmark speech at the Federal Reserve Bank of Philadelphia. His remarks outlined a new SEC posture built around two core principles. Form does not alter substance; a stock retains its nature whether issued on paper, recorded through DTCC, or expressed as a token on a blockchain. Economic reality guides legal treatment; a “token” or “NFT” gains no special pass when it serves as a claim on enterprise profits.

“Congress crafted the securities laws to address specific problems – situations in which people part with their money based on promises that depend on the honesty and competence of others. They were not designed as a universal charter to regulate every novel form of value, digital or otherwise. I have a commitment to humility – to clarify what is not the regulator’s business.”
— SEC Chairman Paul Atkins, November 2025

Atkins then reinforced his position that most tokens in circulation today do not function as securities, since they stem from investment contracts that have already run their course. He also rejected the long-standing view that a token linked to an investment contract continues under securities treatment for its entire lifecycle. This direction diverges sharply from the previous administration’s stance under Gary Gensler.

Cooley LLP quickly published an analysis stating that Atkins’ remarks signal “a pivotal shift” toward structured rules in place of enforcement-driven policy. Analysts describe this as a meaningful step toward clarity and stability for U.S. innovators and global institutions operating in digital markets.

“That era is over. The objective now is to replace ambiguity with clarity, while continuing to pursue fraud and market manipulation aggressively. I have asked the staff to prepare recommendations for the commission’s consideration that facilitate capital formation and accommodate innovation while, at the same time, ensuring investors are protected.”
— SEC Chairman Paul Atkins, November 2025

Project Crypto moves forward on several fronts. A formal token taxonomy grounded in Howey analysis forms the foundation. “Regulation Crypto” introduces disclosures, exemptions, and tailored protections for digital-asset distributions. An “innovation exemption” creates space for emerging business models to operate under principle-driven safeguards while avoiding full legacy compliance during early development.

Leaders across the digital-asset landscape signal rising confidence as CLARITY advances. In recent weeks, senior teams from Coinbase, Ripple, Cardano, Kraken, Circle, along with major funds including Andreessen Horowitz, Multicoin Capital, and Paradigm, met lawmakers in Washington D.C. to refine key sections within the bill.

Coinbase CEO Brian Armstrong, fresh from multiple conversations with senators, delivered an upbeat message. In a video on X during September 2025, he stated he had never felt more confident about imminent progress on market-structure rules.

“All the senators I’ve spoken to are feeling a real sense of urgency to get this done. They’ve told me it’s 90 percent of the way there. They don’t want to be dealing with it in the middle of next year either. Passing the Clarity Act would allow the crypto industry to grow in the United States, protect consumers, and promote innovation.”
— Brian Armstrong, CEO Coinbase, November 2025

Paul Grewal, Chief Legal Officer for Coinbase, reinforced this view during a December 2025 interview with Yahoo Finance. He highlighted the strategic role CLARITY plays in building a full legal foundation for digital markets.

“The Senate is considering their version of the Clarity Act. What the Clarity Act, which passed the House earlier this year, would provide for the first time is a true market structure for crypto here in the United States. Earlier in the year, Congress passed and the President signed a bill regarding stablecoins, which is an important first step in providing clarity and certainty under the law for crypto and digital assets. But it’s really time, it’s essential that Congress finish the job and that’s what it will do when the Senate finally passes market structure legislation.”
— Paul Grewal, Chief Legal Officer Coinbase, December 2025

Kraken co-CEO Arjun Sethi, also active in policy conversations, underscored the momentum created by clear rules and competitive pressure across global markets.

“Clear rules benefit innovators building new tools, promote a competitive environment, and strengthen the wider financial ecosystem. The Clarity Act is only a starting point for what we hope will be a more comprehensive framework in the future.”
— Arjun Sethi, co-CEO Kraken, September 2025

Research and Institutional Perspectives

Benchmark analyst Mark Palmer highlighted strong upside potential from CLARITY in a mid-2025 report. Benchmark raised its target for Coinbase stock to 421 USD and reaffirmed a buy rating.

“The CLARITY Act seeks to establish a comprehensive regulatory framework for digital assets in the U.S. that could provide much-needed certainty around the U.S. government’s treatment of crypto. This is seen as a key prerequisite for further institutional adoption of the asset class. Staking could see a significant boost from the enactment of the CLARITY Act, and this is a positive for Coinbase.”
— Mark Palmer, Benchmark, June 2025

Palmer also pointed to a crucial long-range issue: shifting political winds.

“While the current Securities and Exchange Commission (SEC), under the leadership of Chairman Paul Atkins, has a constructive stance toward crypto, the absence of a codified regulatory framework means that the possibility still exists that a future, anti-crypto administration could quickly undo any pro-crypto rules the agency put in place. That vulnerability has made long-term planning difficult for institutional players looking to build out digital asset offerings. The act, if passed, could eliminate much of that uncertainty, providing a stable foundation for broader industry participation.”
— Mark Palmer, Benchmark, July 2025

Criticism rises in parallel with growing momentum for CLARITY. Progressive senators, consumer advocates, labor unions, and environmental groups now rally around a unified warning: sweeping market-structure reform introduces serious risks. Senator Elizabeth Warren, ranking Democrat on the Senate Banking Committee, leads this push with sharp scrutiny.

During a July 2025 hearing titled “From Wall Street to Web3: Building Tomorrow’s Digital Asset Markets,” Warren presented a five-point framework for new digital-asset rules and delivered a direct message:

“According to the FBI, Americans lost more than $9 billion to cryptocurrency fraud last year, a 66% increase from the year prior. According to Chainalysis, North Korean hackers stole a record $1.3 billion from crypto platforms in 2024, and then another $1.5 billion in a heist earlier this year. According to TRM Labs, ‘terrorist organizations demonstrated increased sophistication in their use of cryptocurrency, turning to unhosted wallets, mixers, and privacy coins like Monero.’ We need a crypto regulatory framework that reduces these risks.”
— Senator Elizabeth Warren, July 2025

Warren also raised concerns around President Trump’s personal exposure to digital assets through World Liberty Financial:

“But I’m concerned that what my Republican colleagues are aiming for is another industry handout – the blessing of the government’s approval, combined with crypto rules that are weaker than the rules every other financial actor must follow. The crypto industry may be calling the shots for Republicans, but nobody wants weak crypto rules more than the President of the United States. A majority of President Trump’s wealth, as much as $7 billion dollars’ worth, is now based in crypto.”
— Senator Elizabeth Warren, July 2025

Expert and Advocacy Perspectives

Amanda Fischer, Policy Director for Better Markets and former SEC Chief of Staff, delivered a detailed critique:

“The Clarity Act is just an attempt to formalize the current business models of crypto firms, leaning more toward accommodating companies than aligning with existing securities laws. The bill provides much weaker oversight of insider trading, market manipulation, and surveillance practices in the crypto sector compared to what applies to traditional stock markets.”
— Amanda Fischer, July 2025

Consumer-rights coalitions reinforced this stance. In December 2025, a broad group including Greenpeace and the Center for Biological Diversity submitted a formal letter urging Congress to reconsider. Their message highlights rising exposure for retail users, with increased vulnerability to fraud under the current draft.

Labor unions added further pressure. The National Education Association expressed major concerns around pension-fund stability:

“This legislation poses profound risks to the pensions of working families and the overall stability of the economy. Rather than just being silent on crypto, this bill strips the few safeguards that exist for crypto and erodes many protections for traditional securities. We urge lawmakers to carefully consider before passing legislation that could threaten the financial security of millions of American workers.”
— National Education Association, December 2025

Additional statements from the AFL-CIO and the Institute of Internal Auditors emphasized rising hazards for consumers and weak governance standards across digital-asset venues.

Part VII: CFTC Takes the Lead – Permitting Spot Crypto Trading

Senate work on CLARITY gains intensity as the CFTC moves forward in a historic shift. On December 5, 2025, Acting Chair Caroline D. Pham confirmed approval for spot crypto products on regulated futures venues under CFTC oversight. This marks the first moment U.S. markets receive a unified gateway for spot digital commodities under a single federal regulator.

Pham presented this move as a core element in President Trump’s plan to position the U.S. as a global hub for digital markets. Her message focused on stronger domestic safeguards and reduced exposure to offshore venues. In many ways, this pivot mirrors CLARITY’s design, placing the CFTC in a central leadership role for spot digital commodities.

Under the “Crypto Sprint” program, the CFTC also accelerates adoption for tokenized collateral, including stablecoins, inside derivatives markets. Updated rules for clearing and settlement infrastructure now embrace blockchain systems, reinforcing CFTC authority across a larger share in digital markets.

Arnold & Porter outlines new challenges as responsibility expands:

“Unlike the SEC, the CFTC has limited experience supervising retail-facing platforms and intermediaries, and its historical focus has been regulating derivatives markets – not spot commodities where its jurisdictional authority is limited to anti-fraud and anti-manipulation. The CLARITY Act would require the CFTC to stand up a full regulatory regime for spot digital commodities markets, including exchange supervision, broker-dealer regulation, and disclosure compliance.”
— Arnold & Porter, August 2025

Former CFTC officials add a broader warning: larger mandates will require new authority and substantial funding to support customer protection in a fast-moving digital environment.

Part VIII: Time Pressure – Racing Against the Congressional Recess

Urgency rises across Capitol Hill. CoinDesk reports rising anxiety as only a few working days remain in the 2025 Senate calendar. Delay pushes CLARITY into January 2026, where midterm politics and expiring budget agreements introduce heavy friction. A new shutdown cycle could easily slow progress for months.

Chris Niebuhr from Beacon Policy Advisors highlights unresolved details:

“The key component that stands out is really that there’s these gaps in the bill, either placeholder text or text that’s missing altogether, that are sort of indicative of the fact that this is really a work in progress. It will be key to see if they can actually get markups in December. But if you can move the bills out of committee, then at that point, you’re not facing too many more pain points. You’re just kind of looking at the calendar.”
— Chris Niebuhr, November 2025

Niebuhr also points to open questions around DeFi rules and CFTC structure. One provision requires a minimum number for commissioners from each party before any rulemaking can begin, and this clause remains unresolved.

Adam Minehardt from Chainlink outlines the House–Senate dynamic:

“I do think the House is going to be in the awkward position of having to take what the Senate produces. The House might want to ensure some form of its own bill, the Clarity Act, is included in whatever President Trump signs, but the Senate is going to continue to be in the driver’s seat. However it shakes out, the bill won’t go to Trump’s desk until after the House has a floor vote, and that could take us well into 2026 – and election season – before he’s able to sign it.”
— Adam Minehardt, November 2025

Pressure increases further as Senate Democrats send a new response to Republicans with demands tied to financial stability, market integrity, national security, and standards for public officials. Both sides share alignment on broad goals, yet major structural sections still require agreement.

Part IX: Remaining Barriers Before Final Passage

CLARITY enters its final stretch with several hurdles still requiring resolution. Timing pressure rises as the Senate calendar closes, leaving minimal room for amendments before the shift into a heated 2026 political cycle. Senators continue to negotiate key sections on DeFi treatment, software-developer protections, and CFTC structure, with each segment carrying weight for bipartisan support.

Investor-protection standards also sit at the center for many Democrats and advocacy groups. Their push for stronger safeguards adds another layer for negotiators. Even so, 2025 records steady movement: the GENIUS Act created early guardrails for stablecoins, the SEC under Paul Atkins pivoted toward structured policy, the CFTC advanced domestic oversight authority, and the House delivered a strong bipartisan vote for CLARITY.

Global Impact Before Final Enactment

International observers track each update from Washington. U.S. leadership in global finance grants significant influence over digital-asset regulation across Europe, Asia, and rising regional hubs. A clear statutory framework in Washington may redirect institutional money and high-value talent that migrated toward friendlier markets during years without certainty.

With momentum building across agencies and Congress, the U.S. now approaches a turning point for global digital-market architecture.

Conclusion 

CLARITY rises beside the GENIUS Act and delivers the first unified legal structure for digital assets in the United States. Stablecoins gain a firm statutory base, while a new framework brings clear classifications, defined authority, and aligned oversight across agencies. Washington shifts from fragmented enforcement into a codified system built for scale, institutional participation, and long-range development.

2025 marks a decisive moment. Congress, the SEC, and the CFTC move in concert, and industry leaders respond with strong support. A single question shaping an entire decade, securities or commodities, finally receives an answer with legal force. That answer sets the direction for U.S. digital markets and positions the country for leadership in global regulatory design.