Crypto regulation bill passes U.S. House, expanding CFTC

In a landmark development for the U.S. cryptocurrency market, the House of Representatives passed the Digital Asset Market Clarity Act of 2025 (CLARITY Act) in July 2025. This bipartisan legislation aims to establish a clear regulatory framework for digital assets, a move widely seen as a significant step toward providing legal certainty for the industry.

A key provision of the bill is the expansion of the Commodity Futures Trading Commission’s (CFTC) authority. The legislation seeks to create a clearer division of jurisdiction between the CFTC and the Securities and Exchange Commission (SEC), ending what many have described as the SEC’s “regulation by enforcement” approach.

Key Provisions and Impact

Expanded CFTC Authority: The bill empowers the CFTC to oversee digital assets classified as “digital commodities” if they operate on a decentralized blockchain. This gives the agency clear regulatory power over the spot market for non-security digital assets like Bitcoin (BTC) and Litecoin (LTC).

Clarified SEC Role: The SEC would retain its authority to regulate digital assets deemed “securities” under the new framework. This clarity is expected to bring an end to the ongoing debate over which assets fall under the SEC’s purview.

Market Structure: The bill introduces new criteria to help digital asset developers and companies determine whether their tokens are subject to oversight by the SEC or CFTC. It also includes provisions to prevent conflicts of interest and the commingling of customer funds on CFTC-registered platforms.

Corporate and Institutional Impact: The passage of this bill is expected to have a significant positive impact on institutions and corporations looking to enter the digital asset space. By statutorily classifying decentralized tokens like Bitcoin as commodities, it removes them from the SEC’s securities-reporting requirements, simplifying compliance for financial advisors and corporate treasuries.

Broader Regulatory Landscape

The CLARITY Act is part of a broader push for regulatory clarity in the U.S. It follows other recent developments that are shaping the digital asset market:

GENIUS Act: Passed in July 2025, this law established a federal framework for stablecoins, requiring issuers to maintain 100% reserves and providing token holders with priority claims in case of insolvency.

SEC’s “Project Crypto”: Under new leadership, the SEC has launched this initiative to modernize securities rules and create a clearer path to registration for crypto businesses. The project aims to accommodate decentralized finance and support “super-apps” that offer a wide range of financial products under a single license.

CFTC’s “Crypto Sprint”: The CFTC has initiated its own “sprint” to implement the recommendations of the President’s Working Group on Digital Asset Markets, with a focus on enabling federally regulated spot trading for digital assets.

While the CLARITY Act still needs to pass the Senate to become law, its successful passage in the House with significant bipartisan support signals a new phase of legislative momentum for the crypto industry. The increased clarity and the shift toward a more defined regulatory framework are expected to bolster institutional confidence and accelerate the integration of digital assets into the traditional financial system.