H.R. 3633: CLARITY Act of 2025

The proposed CLARITY Act of 2025 aims to create a comprehensive regulatory framework for digital commodities, which includes cryptocurrencies and other digital assets. The legislation seeks to provide clarity in definitions, registration processes, and transactional frameworks to enhance market integrity and consumer protection.

Definitions and Regulations

One of the initial focuses of the bill is to define key terms related to digital commodities. This includes outlining specific conditions for digital commodity exchanges and transactions, as well as establishing registration processes. Both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will be responsible for jointly creating rules to effectively regulate activities involving digital assets.

Requirements for Digital Commodity Issuers

The bill places requirements on digital commodity issuers that pertain to transparency and ongoing reporting. These issuers are required to disclose information regarding:

• The maturity of their blockchain systems
• The financial conditions of their operations

The SEC will oversee compliance and establish a certification process for blockchain systems deemed mature. Furthermore, the bill aims to enhance investor protections and includes rules governing disqualification and transaction regulations.

Decentralized Governance and Reporting

For the purposes of regulation, decentralized governance systems will not be considered a single person or group under common control. The maturity of a blockchain system will not be undermined by the actions of such systems. The bill mandates that the Commission must issue rules within 270 days of its enactment to address digital commodities and associated market regulations.

Compliance and Certification

Entities that meet certain eligibility criteria may rely on SEC disclosures when obtaining certifications for compliance. If there are significant changes within these entities, they must update their certifications, which will undergo evaluations similar to those for new certifications. If the Commission disapproves a certification, this decision will include an analysis and will be made public.

Regulation of Digital Commodity Exchanges

Digital commodity exchanges are required to register and adhere to trading standards established to protect customers while ensuring compliance with regulations. There are established compliance requirements for digital asset custody, which mandate adequate supervision by federal or state authorities. The legislation specifies that there should be information-sharing obligations and certain conditions for digital commodity brokers and dealers, which involve:

• Registration requirements
• Capital maintenance
• Reporting duties
• Risk management
• Customer protection measures

Exemptions may be available to foster innovation in the industry.

Staffing and Authority

The bill also outlines positions within the Commission that require specialized knowledge of digital commodities, ensuring these roles are part of the competitive service and do not transition to excepted service. Additionally, the authority granted under this section is set to expire four fiscal years after the bill's enactment.

Relevant Companies

None found