Analysis and Impact of the U.S. "Digital Asset Market Clarity Act"

I. Overview of Legislation and Core Content

In 2025, the U.S. House of Representatives advanced the "Digital Asset Market Clear Act" (referred to as the "CLARITY Act") with an overwhelming majority, and the bill has now entered the Senate review stage. If it passes the subsequent Senate vote, it will mark a historic step for the U.S. in the field of digital asset regulation.

The CLARITY Act aims to establish clear definitions and regulatory rules for digital assets, particularly clarifying the regulatory boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). After the Act is passed, the CFTC will be responsible for regulating exchanges, brokerages, dealers, and projects that meet the "mature chain" standards. The SEC will be responsible for securities-type assets and cryptocurrencies with investment contract characteristics. The CLARITY Act, along with the GENIUS Act, constructs a comprehensive regulatory system for digital assets, with the former focusing on blockchain infrastructure and asset attribute classification, and the latter concentrating on stablecoin regulatory norms.

|Category|Regulatory Authority|Core Definition|Key Regulatory Requirements| |-------|------------|----------------------------------------|---------------------------------------------------------------| |Commodity|CFTC|Decentralized, permissionless, native tokens without financial rights (e.g., BTC, ETH)|CFTC manages trading platforms, brokers, and dealers. Project parties do not need to register but must meet the "mature chain" standards and report architectural certification| |Securities|SEC|Tokens that have the nature of an investment contract or rely on the issuer to obtain profits (such as tokens in the SAFT phase)|Issuers and platforms must comply with the Securities Act, register as broker-dealers/trading platforms, disclose financial and fundraising information, and submit to SEC review| |Payment Stablecoins|CFTC + SEC|Tokens pegged to fiat currency, with 1:1 reserves and used for payments (e.g., USDC, USDT)|Liquidity regulation is mainly handled by the CFTC, while the SEC is responsible for anti-fraud; additionally, must comply with the reserve, audit, and KYC/AML requirements of the GENIUS Act|

The core content includes:

1. Establish the definition of "digital goods"

   Clearly classify the realized decentralized native cryptocurrencies (such as BTC, ETH) that operate on an open blockchain as "digital commodities," falling under the jurisdiction of the CFTC, distinguishing them from the securities assets regulated by the SEC.

2. Mature Blockchain System Recognition Mechanism

   Introduce the "Mature Blockchain" standard, allowing specific projects to transition their tokens from "security" status to "commodity" after reaching technical and governance thresholds such as decentralization, governance de-control, and open-source code, thereby exempting them from the burdensome compliance requirements under securities law. Such projects are subject to securities law during the initial issuance phase (e.g., SAFT, ICO, IPO), but once the project completes its decentralization transformation, its tokens can be reclassified as digital commodities, regulated by the CFTC.

3. DeFi Project Compliance Exemption Clause

Exempt DeFi protocols that do not involve asset custody and do not have a centralized intermediary structure from registration obligations, while clarifying that front-end developers and node operators do not bear financial intermediary responsibilities, thus reducing compliance burdens.

4. Information Disclosure and Insider Trading Restrictions

Platforms operating digital asset trading markets must register with the CFTC as a "digital commodity exchange," including over-the-counter brokers and market makers. These entities will comply with strict federal regulatory requirements, such as minimum capital, risk management, trading records, regulatory reporting, and customer asset protection. If a company is involved in both securities and digital commodity business, it must register separately with the SEC and CFTC. Although the compliance burden is heavy, the legislation clearly delineates the regulatory boundaries for both.

5. Legalization of Traditional Institutions' Participation

Provide legal basis for custody and trading of crypto assets for traditional financial institutions such as banks and brokerages, promoting broader access of traditional capital to the digital asset market.

2. Impact on the Crypto Market

1. The transparency of regulations regarding digital assets has increased, enhancing market confidence.

The CLARITY Act provides a clear compliance path for the entire cryptocurrency industry, ending the long-standing chaos of "enforcement instead of regulation." Project teams and trading platforms can operate within a legal framework, enhancing the transparency of core market infrastructure, helping to prevent fraud and abuse, and boosting consumer trust. This will attract more institutional funds into the market, increasing market liquidity and activity. For institutions, it allows for further compliance, avoiding risks similar to those faced in previous regulatory lawsuits. For consumers, the Act mandates that cryptocurrency issuers disclose relevant information and restrict insider trading, protecting consumers' legal rights and reducing investment risks.

2. The direction of the U.S. cryptocurrency asset regulatory system is moving towards "de-SECification"

For a long time, the SEC has defaulted most cryptocurrencies as securities, leading to regulatory disputes for multiple projects. The CLARITY Act builds a new regulatory framework through structural allocation for the vast majority of fully decentralized assets, allowing such assets to no longer follow the SEC's regulatory system.

3. Traditional exchanges can obtain digital asset exchange licenses

The CLARITY Act allows traditional securities exchanges to apply for a "digital commodity exchange" license, which means that in the future, traditional trading platforms may provide both stock and digital asset (such as Bitcoin, Ethereum, etc.) trading services simultaneously, enabling investors to seamlessly allocate traditional and crypto assets on the same platform. This not only lowers the user threshold but also provides a compliant and trustworthy entry point for mainstream traditional financial capital to enter the crypto market.

3. Impact on DeFi Projects

1. Clarify the exemption mechanism to protect protocol developers.

As long as DeFi projects do not engage in intermediary activities, their developers and operators do not need to register with the SEC or CFTC. Writing code, running nodes, or providing front-end interfaces are generally not considered financial service providers.

• Non-custodial ≠ Intermediary: If the protocol does not custody user assets and does not provide traditional financial services, its developers, node operators, and front-end maintainers are not considered financial intermediaries and are not required to bear registration or licensing obligations.

• Code and operations are risk-free: Self-publishing smart contracts or wallet software does not constitute a securities issuing entity; its actions are similar to technology releases and are not covered by financial regulation.

2. Introduce self-custody rights to protect the property rights of DeFi users.

Section 105 and related provisions guarantee users' rights to self-manage their digital assets, confirming that users can freely conduct peer-to-peer transactions through non-custodial wallets and legally enjoy control over their funds. This right provides legal protection for DeFi users, ensuring they do not have to worry about policy penalties for choosing self-custody.

• Legal custody freedom: Users manage assets with hardware or software wallets, without relying on banks or third parties (financial institutions) for intervention.

• Autonomous trading rights: Users can autonomously initiate on-chain transfers, participate in DeFi protocol governance, and liquidity mining without the need to register with KYC intermediaries.

• Establish the concept of U.S. sovereign digital rights: Incorporate "controlling the private key means controlling the asset" into the legislative framework to ensure that actions on private chains are not considered illegal or requiring permission.

3. Impact on representative DeFi projects:

For most DeFi projects, the operation of their protocols typically aligns with the CLARITY Act's definition of a "non-intermediary" role. Therefore, after the passage of the Act, they are expected to gain clear registration and intermediary exemption qualifications, leading to significant compliance benefits in the short term. However, this does not mean that DeFi has achieved full compliance. It is worth noting that the official tokens issued by many platforms still face legal uncertainty regarding whether they constitute securities, which depends on whether they possess the characteristics of an "investment contract," such as whether the returns for investors depend on the actions of the project party. Thus, while the CLARITY Act provides regulatory clarity at the protocol level, it does not definitively resolve compliance issues at the token level. To reduce the risk of platform tokens being classified as securities, project parties must continue to enhance the transparency of governance structures, strengthen community-led governance mechanisms, and gradually decentralize control to improve the compliance of tokens and build a more robust legal firewall.

|Project|Protocol Operation Entity|Compliance Direction| |----------|-------------|------------------------------------------------------| |Some DEX|Frontend Interface + On-chain Contract|Frontend does not custody assets, on-chain AMM model meets "non-intermediary" conditions, no need to register with SEC or CFTC.| |Aave|Lending Smart Contract|The core lending contract does not custody assets, and the protocol layer meets the exemption criteria.| |Lido|staking service|stETH belongs to derivative rights, and if not sufficiently decentralized, may not be classified as a digital asset, and its asset attributes need further clarification.| |Curve|AMM contract|The on-chain pool operates in a concentrated algorithm-driven mode, without a custodial role, and the protocol layer is expected to be exempt from regulation.| |Compound|Lending Smart Contract|The lending agreement is driven by a smart contract, without asset custody.| |StarGate|Cross-chain Bridge Smart Contract|As a bridge protocol and liquidity pool provider, the protocol does not custody user funds and does not have an intermediary nature, and is expected to enjoy DeFi exemption clauses.|

4. Future Development

As of July 23, 2025, the "CLARITY Act" has successfully entered the review stage in the U.S. Senate, marking a key step forward in the regulatory legislation of digital assets. The biggest point of contention in the current legislative process is whether the Senate version can retain the key provisions regarding DeFi and token classification from the version passed by the House of Representatives. This decision will depend on the hearing procedures of the relevant Senate committees and subsequent amendments to the provisions.

From an overall trend perspective, the "CLARITY Act" is expected to promote the establishment of a clearer and tiered regulatory framework for cryptocurrency assets in the United States within the coming months: security tokens will be regulated by the SEC, while commodity tokens will fall under the jurisdiction of the CFTC. This framework will provide clear compliance pathways for blockchain developers, DeFi protocols, trading platforms, and more, which will not only help reduce legal uncertainties but also stimulate compliance innovation and attract institutional funds, further consolidating the United States' leadership position in global digital asset policy formulation.

In addition, the linkage between the "CLARITY Act" and the "GENIUS Act," which has been officially signed by Trump, lays a dual-pillar foundation for the compliance system of the U.S. cryptocurrency market. The former focuses on asset classification and market structure, while the latter provides a safe harbor for stablecoin issuance and a registration exemption pathway. Together, they construct a complete compliance closed loop of "first exemption, then transformation, and finally classification." Once the "CLARITY Act" is also officially passed and signed into law, it will mark the entry of the U.S. cryptocurrency asset legislative system into a comprehensive implementation phase, significantly enhancing the legitimacy and strategic position of cryptocurrency assets within the mainstream financial system in the United States.

Risk Warning:

The information provided is for reference only and should not be considered as advice to purchase, sell, or hold any financial assets. All information is provided in good faith. However, we make no representations or warranties, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of such information.

All cryptocurrency investments (including returns) are inherently highly speculative and involve significant risk of loss. Past, assumed, or simulated performance does not necessarily indicate future results. The value of digital currency can go up or down, and there may be significant risks involved in buying, selling, holding, or trading digital currency. You should carefully consider whether trading or holding digital currency is suitable for you based on your individual investment goals, financial situation, and risk tolerance.