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

CFTC and SEC each perform their duties.

Article by: Cointelegraph

Translation: 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

• Clarify definitions and responsibilities: The bill aims to create a clear, structured framework to resolve years of regulatory ambiguity, defining what constitutes a digital asset, the roles of intermediaries, and what information needs to be disclosed.
• CFTC and SEC each perform their duties: Most spot trading of qualified tokens will fall under CFTC regulation, while SEC will continue to oversee primary market issuance, disclosures, and investor protection.
• Regulating assets and conduct: The bill not only focuses on the assets themselves but also emphasizes market conduct, establishing registration and conduct standards for exchanges, brokers, and traders to enhance market integrity and transparency.
• Complementary to the Stablecoin Bill: The Stablecoin Bill, primarily governed by the “GENIUS Act,” addresses stablecoins, while the “CLARITY Act” plays a supplementary role, 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, providing 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 criticisms of the bill, and its legislative progress.

Why the “CLARITY Act” Matters

The “CLARITY Act” addresses a longstanding problem 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 resolve this deadlock by clearly defining digital assets and assigning regulatory responsibilities based on asset type and activity. 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 mainly through three approaches:

More precise asset classification

The “CLARITY Act” introduces the concept of “digital commodities,” referring to digital assets whose value primarily 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 blockchain functionality and network decentralization, reflecting real-world blockchain operations.

Clarify regulatory boundaries

The bill delineates regulatory responsibilities by function:

• CFTC gains primary authority over digital commodity trading, especially in secondary markets, spot markets, and trading platforms.
• SEC retains authority over primary market issuance, investor protection, necessary disclosures, and initial sales.
• The bill encourages joint rulemaking in overlapping areas like disclosures between the two agencies.

Establish unified disclosure and conduct standards

To protect investors and ensure market fairness, the bill requires developers and issuers to provide standardized disclosures. These should include technical details of the blockchain, 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 mainly overseeing trading 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 crypto market structure is influencing policymakers’ thinking on regulating AI models, as both involve issues of responsibility and rapid innovation.

How the “CLARITY Act” Regulates Stablecoins

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

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

On “Mature” Blockchains

Considering assets evolve over time, the “CLARITY Act” provides a pathway for blockchains to be recognized as “mature” once they meet certain decentralization and functionality standards.

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 a “mature blockchain” reflects the idea that as networks become more decentralized and distributed, their regulatory approach should adapt accordingly. It offers projects 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 cryptocurrencies, highlighting how existing legal frameworks are often forcibly 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’s anti-fraud authority applies 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 Senate action, 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 held hearings, released discussion drafts, proposed amendments, and advanced versions of broader market structure legislation. However, disagreements over stablecoin yields and investor protections have delayed and complicated revisions. Coordination between the House and Senate versions is ongoing, with no final vote yet.

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

Some blockchain networks now publish real-time transparency dashboards showing validator concentration, token velocity, and governance participation. When regulators discuss whether a network is “sufficiently decentralized,” they sometimes refer to this data.

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 the rules from the start.

Of course, legislation is just the first step. How it is implemented, the development of detailed regulations, 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.