Closing credits for the Clarity Act: A look back at what it contains and its alternatives

The Clarity Act failed to pass, and the U.S. crypto industry lost an opportunity for a clear regulatory alignment. The bill would have given the Commodities Futures Trading Commission (CFTC) full oversight of the cryptocurrency spot market and attempted to provide limited legal protection for DeFi ( DeFi ) developers. After the act was shelved, SEC immediately took action, with the US Cryptocurrency Regulatory Framework entering another phase of uncertainty.

Why this bill is so crucial

At the heart of the problem is a split in regulatory power. The US system divides securities and derivatives into two separate entities: SEC for securities, and CFTC for commodity and derivative products. This contrasts sharply with other markets around the world's widespread adoption of single-entity regulation, which has resulted in each asset belonging to one minefield from the outset.

With Bitcoin (about $80,290.76) and Ethereum being recognized as commodities, an obvious problem has emerged: most crypto transactions take place in the spot market, where there is a long-standing lack of routine regulation. Regulators are only involved when malicious events such as market manipulation occur.

What the bill was supposed to do

It is precisely around these contradictions that the core content of the Clarity Bill revolves:

Division of jurisdiction The act classifies the different types of blockchain native assets, clarifying which agency regulates each type of asset and resolving at its roots the conflict of jurisdiction between SEC and CFTC.

The CFTC's powers have been enhanced. One of the most important changes in the bill is to give the CFTC full regulatory authority over crypto commodity spot markets, filling a long-standing regulatory gap.

Fight against illicit finance The bill contains several provisions to curb illicit financial activities in the field of crypto.

Protect the DeFi developers. On the most contentious issue, the bill attempts to provide limited legal immunity for DeFi 's software developers from being sued over how others use their code. This is an issue that has been sharply divided between industry and regulators.

The real reason for the law's delay

According to the authors' analysis, the provisions that ultimately led to the bill's failure have little to do with the primary purpose of the legislation. In other words, a bill designed for crypto regulation borders on being dragged along by controversy unrelated to its core content. This is also a common phenomenon in the US legislative process: comprehensive bills are often bogged down by political games triggered by ancillary provisions.

The next step: how SEC will be replaced

The policy vacuum left by the bill did not last long. SEC has moved quickly to try and fill this "Clarity-shaped void" in its own way. For market participants, that means:

• Bitcoin , Ethereum , etc., which would remain in the absence of a day-to-day regulatory body;
• The legal risks faced by the developers of DeFi remain unresolved;
• The future direction of regulation will depend more on the individual enforcement and rule-making of SEC than a unified arrangement at the legislative level in Congress.

Progressive regulation by the executive branch is often more difficult to predict than a written bill. The specific actions of SEC that follow will be the most important window into where U.S. crypto policy is headed.