CLARITY Act Draft Establishes Federal Crypto Framework with CFTC at Helm

A new draft bill, dubbed the CLARITY Act, aims to establish a federal regulatory framework for cryptocurrency and digital-asset activities. The proposal assigns the Commodity Futures Trading Commission (CFTC) a central role for digital commodities, while retaining a defined Securities and Exchange Commission (SEC) role for certain primary-market sales.

The draft would place cash and spot-market sales of digital commodities under the CFTC's exclusive jurisdiction, requiring exchanges, brokers, and dealers in those markets to register with the agency. It would also establish customer-asset protections by requiring those assets to remain the customer's property and generally barring their commingling with intermediary funds.

The bill combines language from several previous proposals, including H.R. 3633 and S. 3755. An originator could raise no more than $200 million under the exemption and would have to file disclosures with the SEC. The disclosure requirement would no longer apply if an issuer certified that it engaged in minimal entrepreneurial or managerial efforts and those efforts were not a primary factor in determining the asset's value.