The new version of the CLARITY Act, which is over 300 pages long, delineates jurisdiction between the CFTC and the SEC, but is still opposed by Democrats due to its lack of ethics provisions related to Trump.
After nearly a year of bipartisan negotiations, Senators Tim Scott, Cynthia Lummis, and Thom Tillis have just released a revised version of the CLARITY Act , a legislative document expected to establish the first comprehensive regulatory framework for the cryptocurrency market in the United States. However, instead of creating consensus, this 300-page update has further deepened Capital rifts within Congress and among industry participants.
In terms of content, the bill clearly delineates the long-blurred regulatory boundaries: the Commodity Futures Trading Commission (CFTC) will oversee spot markets for digital commodities, while the Securities and Exchange Commission (SEC) will retain authority over Token classified as securities. A completely new legal category, “digital commodities,” is introduced for Token linked to blockchain functionality.
Additionally, the bill imposes mandatory disclosure requirements on Token Issuance, establishes separate registration mechanisms for exchanges and custody services, and protects open-source software and DeFi protocol developers on the condition that they do not control users' funds. KYC, AML, and anti-market manipulation measures are also integrated into the text.
Ethical dilemmas cast a shadow over the legislative process.
However, the biggest disagreement lies not in legal technique but in politics. The Democrats, led by Senator Ruben Gallego, are adamant about including the conflict of interest provision directly in the bill, rather than dealing with it through a later amendment.
Concerns center on the increasing involvement of Donald Trump and entities associated with him in the cryptocurrency industry, a fact that Democrats argue creates a serious conflict of interest risk if legislation is passed without clear ethical safeguards.
According to Politico, some Democratic senators are prepared to withdraw their support if these provisions are not added during the Senate Banking Committee's XEM phase. Republicans counter that ethical issues are outside the committee's jurisdiction.
Besides political disagreements, the bill also faces pressure from traditional financial institutions. The central point of conflict between the banking industry and cryptocurrency representatives revolves around regulations on stablecoins, particularly the provision prohibiting stablecoins from paying interest similar to bank deposits while still allowing some forms of transaction-based rewards.
Against this backdrop, SEC Chairman Paul Atkins proactively clarified which crypto asset classes fall outside the scope of securities laws, and CFTC leaders and the SEC reached an agreement on the Chia of supervisory responsibilities—moves that demonstrate the executive branch is not waiting for Congress.
