The Digital Asset Market Clarity (CLARITY) Act would split US crypto oversight by token function — handing spot digital-commodity markets to the Commodity Futures Trading Commission while leaving investment-contract assets with the Securities and Exchange Commission — a structural choice that diverges sharply from the EU’s single-licence MiCA regime, the UK’s perimeter approach, and Singapore’s payment-token framework.

The CLARITY Act allocates jurisdiction over digital assets between two federal agencies on the basis of what a token does rather than how it was sold, granting the Commodity Futures Trading Commission (CFTC) exclusive authority over spot markets in “digital commodities” while the Securities and Exchange Commission (SEC) retains investment-contract assets. The Senate Banking Committee advanced its substitute version by a 15-9 vote on May 15, 2026, after the House passed the Digital Asset Market Clarity Act of 2025 (H.R. 3633) in July 2025. This analysis walks through what the bill actually does, how four jurisdictions diverge on the security-versus-commodity question, the enforcement record that produced the demand for it, and what compliance teams should prepare for.

Key Facts:

• The Senate Banking Committee approved its CLARITY Act substitute 15-9 on May 15, 2026 — Roll Call
• The House passed the Digital Asset Market Clarity Act of 2025 (H.R. 3633) in July 2025 — Congress.gov
• The bill creates three token classes: digital commodities (CFTC), investment-contract/”ancillary assets” (SEC), and payment stablecoins (joint) — Congress.gov
• “Digital commodity” takes its meaning from section 1a of the Commodity Exchange Act — Congress.gov
• The SEC and CFTC issued a joint interpretation on crypto-asset classification on March 17, 2026 — SEC
• A companion Senate Agriculture bill, S. 4064, carries the CFTC market-oversight provisions — Congress.gov

Methodology and sources

This analysis relies on primary legislative and regulatory documents: the text of H.R. 3633 as published on Congress.gov, the Senate Banking Committee’s published materials on its substitute amendment, the SEC-CFTC joint interpretive guidance of March 17, 2026, and the underlying statutes — the Commodity Exchange Act and the Securities Act of 1933. For the comparative jurisdictions it draws on the Markets in Crypto-Assets Regulation (MiCA), Regulation (EU) 2023/1114; the UK Financial Conduct Authority’s financial-promotions framework; and Singapore’s Payment Services Act 2019. The time window is the 119th Congress through June 2026. The bill is not yet law, so all US provisions described are as approved at committee stage and remain subject to floor amendment and House reconciliation.

What the CLARITY Act actually says

The bill’s organising idea is a functional taxonomy. A “digital commodity” is a token whose value derives from the use of a functioning blockchain — assets such as Bitcoin, Ether, and Solana, where the network does something and the token is its fuel. Those tokens fall to the CFTC, which would receive exclusive jurisdiction over their spot markets, including the registration and supervision of digital-commodity exchanges, brokers, and dealers, and anti-fraud and anti-manipulation authority over those venues.

An “investment-contract asset” — a token sold to fund a venture where a central team raises capital and promises to build — stays with the SEC. The substitute defines many network tokens as “ancillary assets” and, where they are offered in connection with an investment contract, exempts them from SEC registration. The drafting matters here: the bill provides a rebuttable presumption plus a written-certification process, letting an originator certify, on reasonable evidence, that a network token is not a security subject to registration.

The CLARITY Act’s central mechanism is the maturity-and-decentralisation test that moves a token from the SEC’s column to the CFTC’s. A token launched by a promoter to raise funds is treated as an investment-contract asset under the Securities Act of 1933; once the underlying blockchain is functional and sufficiently decentralised, the same token can be certified as a digital commodity regulated by the CFTC under section 1a of the Commodity Exchange Act. That migration path is the bill’s answer to years of litigation over whether a single token is permanently a security. Payment stablecoins form a third class with joint oversight, dovetailing with the separately enacted stablecoin statute and leaving both agencies a role in dollar-pegged tokens used to move money.

Sources: Congress.gov (H.R. 3633), Regulation (EU) 2023/1114 (MiCA), FCA financial-promotions framework, MAS Payment Services Act 2019. Last updated: June 3, 2026.

How four jurisdictions compare

The four frameworks answer the same question — is a token a security, a commodity, or something else — in structurally different ways. The United States, uniquely, builds a binary between two market regulators and a migration path between them. The CLARITY Act’s premise is that the same asset can change category as its network matures, a moving classification no other major jurisdiction adopts.

The European Union sidesteps the security/commodity binary altogether. Under MiCA, a crypto-asset that is not already a financial instrument under the Markets in Financial Instruments Directive (MiFID II) is regulated as a crypto-asset through a single crypto-asset service provider (CASP) authorisation, supervised by national competent authorities with the European Securities and Markets Authority (ESMA) setting technical standards. There is no CFTC-style commodity track; the question is simply whether an instrument is a MiFID financial instrument or a MiCA crypto-asset. The UK takes a third route, pulling cryptoassets into the regulated perimeter incrementally — first through the financial-promotions regime that took effect on October 8, 2023, treating cryptoassets as “restricted mass market investments,” with a broader regulated-activities expansion still being phased in. Singapore regulates by economic function under the Payment Services Act 2019, licensing Digital Payment Token services while routing capital-markets tokens to the Securities and Futures Act.

The divergence creates regulatory-arbitrage risk. A token treated as a CFTC-supervised digital commodity in the United States could be a MiCA crypto-asset in the EU, a restricted mass-market investment in the UK, and a Digital Payment Token in Singapore — four perimeters, four sets of disclosure and conduct rules, and no automatic mutual recognition. Firms operating across all four must map each asset to four taxonomies rather than one, and the US migration path means a token’s home-market status can change without any change to the token itself. That is the practical cost of the CLARITY Act’s elegance: it resolves the domestic security-versus-commodity fight at the price of deepening cross-border classification mismatch, a tension already visible in how the SEC’s liquid-staking guidance diverges from MiCA and MAS.

“It means clear disclosures, safeguards against fraud and rules that keep markets open, fair and efficient.”

— Tim Scott, Chairman, US Senate Banking Committee (R-S.C.) (Roll Call)

The enforcement record that drove the bill

The demand for a statutory taxonomy came directly from litigation. In SEC v. Ripple Labs, Inc. (S.D.N.Y., No. 20-cv-10832), Judge Analisa Torres ruled on July 13, 2023 that Ripple’s programmatic sales of XRP on exchanges were not offers of investment-contract securities, while its institutional sales to sophisticated buyers were. The court later ordered a civil penalty of roughly $125 million, imposed in August 2024. The outcome left the same token classified two ways depending on how it was sold — the precise ambiguity the CLARITY Act is written to end.

Ripple was not isolated. The SEC’s mid-2020s campaign against major exchanges over alleged unregistered securities trading, and the contested status of tokens listed on those venues, produced years of uncertainty about which assets could trade where and under whose rules. The agencies’ own response — the SEC-CFTC joint interpretation issued on March 17, 2026 — sought to align the two regulators’ reading of how the federal securities laws apply to crypto assets ahead of any statute. The CLARITY Act would convert that interpretive alignment into a durable jurisdictional allocation, replacing case-by-case application of the Howey investment-contract test with a certification regime and an explicit commodity track. For firms, the shift is from litigating classification after the fact to certifying it in advance and accepting the supervisory regime that follows.

What this means for exchanges, brokers, and compliance teams

For digital-asset exchanges and brokers, the operational change is a registration choice. Venues trading tokens certified as digital commodities would register with and report to the CFTC as digital-commodity exchanges, brokers, or dealers, adopting CFTC market-conduct, custody, and anti-manipulation requirements rather than the SEC’s national-securities-exchange framework. Firms listing both digital commodities and investment-contract assets would face dual registration and parallel rulebooks, with the certification status of each listed token determining which applies.

For fund managers and custodians, the maturity-and-decentralisation test introduces a monitoring burden: a token’s classification can change, and with it the permissible custody, marketing, and investor-eligibility rules. Compliance teams should prepare to document the evidentiary basis for any digital-commodity certification, track the rebuttable presumption’s conditions, and maintain the written certifications the SEC process requires. Legal teams at cross-border firms face the larger task — reconciling a US classification that can migrate with static EU, UK, and Singapore perimeters, an exercise that echoes the mapping problems firms already navigate under the GENIUS Act and MiCA stablecoin split and the divergence as the MiCA July 1 cliff pulls three rulebooks apart. Until the bill is law, the prudent posture is scenario planning against the committee text rather than re-papering live arrangements.

“We’re spending our time working on a bill written by the crypto industry for the crypto industry.”

— Elizabeth Warren, Ranking Member, US Senate Banking Committee (D-Mass.) (Roll Call)

What’s next — the forward view

The bill now moves toward the Senate floor, where amendments on consumer protection, DeFi treatment, and the decentralisation test are expected before any vote. Because the Senate Banking Committee replaced the House-passed text with a substitute, the House would have to take up the Senate version, making a reconciled, merged bill plausible only by late summer 2026 at the earliest. The companion Senate Agriculture measure, S. 4064, carries the CFTC’s market-oversight provisions and would need to be squared with the Banking Committee’s substitute. Even after enactment, the operative detail would arrive through CFTC and SEC rulemaking — registration categories, certification procedures, and the metrics that define “sufficiently decentralised” — none of which the statute fully specifies. Watch the Senate floor calendar, the joint SEC-CFTC advisory committee the bill establishes, and whether the agencies’ March 17 interpretation is updated to track the final text. Internationally, the contrast with Asia’s faster licensing regimes — visible in Japan’s FIEA shift and the SEC’s tokenised-stocks exemption — will shape where issuers domicile.

FAQ

What is the CLARITY Act?

It is the Digital Asset Market Clarity Act, a US crypto market-structure bill that divides oversight between the CFTC and SEC based on whether a token is a “digital commodity,” an investment-contract asset, or a payment stablecoin. The House passed H.R. 3633 in July 2025, and the Senate Banking Committee advanced its substitute 15-9 on May 15, 2026.

Which assets go to the CFTC and which to the SEC?

Tokens whose value derives from a functioning blockchain — such as Bitcoin, Ether, and Solana — are “digital commodities” under CFTC spot-market jurisdiction. Tokens sold to fund a venture remain investment-contract assets under SEC oversight, with a certification process to reclassify mature, decentralised networks as digital commodities.

How does it differ from the EU’s MiCA?

MiCA avoids a security/commodity split. A crypto-asset that is not a MiFID II financial instrument is regulated as a crypto-asset under a single CASP authorisation. The CLARITY Act instead creates two market regulators and a migration path between them, a structure unique among major jurisdictions.

Is the CLARITY Act law yet?

No. As of June 2026 it has passed the House and cleared the Senate Banking Committee at committee stage. It still needs a Senate floor vote and House reconciliation of the Senate substitute, making a final, merged bill plausible only by late summer 2026 at the earliest.

What does it mean for crypto exchanges?

Exchanges trading digital commodities would register with the CFTC as digital-commodity exchanges, brokers, or dealers, adopting CFTC conduct and custody rules. Venues listing both digital commodities and investment-contract assets would face dual registration, with each token’s certification status determining the applicable regime.

Why was the bill needed?

Litigation such as SEC v. Ripple Labs left the same token classified differently depending on how it was sold — programmatic XRP sales were held not to be securities while institutional sales were. The CLARITY Act replaces case-by-case application of the Howey test with a statutory taxonomy and certification process.

This article is informational analysis only and does not constitute legal, regulatory, tax, or investment advice. Regulatory frameworks change frequently and interpretation depends on facts and circumstances; primary documents and official regulator guidance always supersede summaries. Firms should consult qualified legal counsel and their relevant supervisory authority before taking any action based on the analysis above.

Rick Steves

Rick Steves has seen business and economics through many lenses. He joined the financial services industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Steves' work has appeared in a variety of online publications including FX Street, NewsBTC, FinanceFeeds, and The Industry Spread. Rick has great interest in the dynamics of the trading industry. The never-ending clash between technology, economics, regulation, and more importantly, the people.