Crypto market structure bill passes US House
The House on Thursday passed the CLARITY Act, a landmark cryptocurrency market structure bill
DCStockPhotography/Shutterstock modified by Blockworks
The US House on Thursday passed the CLARITY Act, a first-of-its-kind cryptocurrency market structure bill that has divided the industry.
The bill passed in a 294-134 vote with 78 Democrats voting in favor of the measure.
Read more: Move over, big, beautiful bill: Crypto Week is coming
The CLARITY Act divides authority over digital assets between the Commodity and Futures Trading Commission and the Securities and Exchange Commission.
The legislation also establishes a formal definition for “digital commodities.” These would fall under the CFTC’s purview while cryptocurrencies classified as securities would be the SEC’s responsibility.
Representatives who voted against the bill argue it does not provide enough oversight of the industry and leaves gaps that could harm cryptocurrency users.
“Let me be clear, I support the growth of digital assets, blockchain innovation and the promise crypto holds for expanding financial access and economic justice, but this bill is not clarity,” Democrat Sydney Kamlager-Dove said during debate Thursday morning. “It is confusion cloaked in legislation.”
Some in the industry have taken issue with decentralization in the bill. Sufficiently decentralized blockchains — defined in the legislation as transparent chains with no person or individual in control — are considered commodities.
Read more: The bills up for debate as ‘Crypto Week’ continues
Others support aspects of the bill, but insist that it still needs more work to fully close existing regulatory gaps.
“As drafted, CLARITY does not extend federal preemption to the ‘exclusions for decentralized finance activities,’ leaving states free to create different, inconsistent rules,” crypto advocacy group DeFi Education Fund wrote in a recent blog post.
“It’s important to close this gap and ensure that after all of the hard work Congress is doing to create clear laws for the industry, we don’t end up with a patchwork of 50 state laws taking differing positions.”
The bill succeeds in other ways, though, DEF added, such as allowing for self-custody and excusing certain protocols and software engineers from some reporting and regulatory requirements.
The legislation now moves to the Senate, where its path to becoming law could stall. Senate Democrats have expressed concern that the legislation does not include enough consumer protections and paves the way for President Trump’s crypto business interests to flourish.
Updated at 3:32 p.m. ET to reflect final vote count.
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