CLARITY Act

Jul 29, 2025 | Updated Jul 29, 2025

The CLARITY Act is proposed U.S. legislation that would establish a comprehensive regulatory framework for digital asset markets.

What Is the CLARITY Act?

The Digital Asset Market Clarity Act, commonly known as the CLARITY Act (HR 3633), is a piece of legislation that aims to create clear regulatory pathways for digital assets in the United States.

The legislation seeks to establish comprehensive regulatory standards for digital assets, similar in scope to foundational securities laws. The bill follows the previous FIT21 bill and includes provisions for consumer protections, decentralization standards, and regulatory frameworks.

What Does the CLARITY Act Do?

The CLARITY Act aims to alleviate regulatory uncertainty for market participants by establishing a federal regulatory framework for digital assets.

The legislation establishes several key frameworks:

Digital Commodities Regulation: Creates a regulatory pathway for digital assets that give users ownership in blockchain systems, referred to as “digital commodities.” The bill uses a control-based maturity framework for blockchain projects to access public markets.
Intermediary Oversight: Centralized actors in crypto—such as exchanges, brokers, and dealers—must register with the Commodity Futures Trading Commission (CFTC) and adhere to compliance standards similar to traditional financial institutions.
Jurisdictional Clarity: Establishes a pathway for digital assets to transition from Securities and Exchange Commission (SEC) oversight to CFTC regulation. Initial token sales remain under SEC jurisdiction as securities transactions, while secondary market transactions transition to CFTC oversight when projects meet seven specified criteria for decentralization.
Consumer Protection Measures: Digital commodity issuers must provide mandatory public disclosures to retail participants. The act restricts insider trading by limiting early stakeholders’ ability to sell during certain periods, with different restrictions than the current law, which requires insiders to hold digital assets for one year.
DeFi Framework: Decentralized finance protocols that don’t act as intermediaries are exempted from the regulatory requirements established for centralized exchanges and brokers. The legislation establishes standards for DeFi projects to launch native tokens, utilize decentralized governance, and offer self-custody solutions.
Control-Based Maturity Framework: Uses seven specified criteria to determine when a blockchain system is no longer controlled by individuals or centralized groups, replacing the SEC’s existing 40-factor decentralization assessment from 2019. The framework applies different oversight levels based on the degree of centralized control.

The CLARITY Act is designed to work alongside the stablecoin-focused GENIUS Act (stablecoin legislation). While GENIUS regulates stablecoins, CLARITY would regulate the underlying blockchain infrastructure on which stablecoins operate.