CLARITY Act Proposes Regulation for US Crypto Market

The CLARITY Act is a proposed law that aims to provide clarity and regulation for the US crypto market. The bill, which was passed in the House by 294-134 in July 2025, seeks to create a legal path for tokens to transition from capital formation into regulated secondary trading.

This distinction could change how crypto projects launch, how US exchanges list assets, and how traditional financial institutions enter the market. However, it would not make every token legal or eliminate enforcement, nor would it create an immediate wave of demand.

The bill attempts to replace part of the uncertainty in the market with a registration and disclosure system. A key feature is the separation between an investment contract and the digital asset sold through it. Projects may raise money in a transaction governed by securities law, but that does not necessarily mean the token itself must remain a security forever.

The SEC would continue to oversee fundraising stages, issuer disclosures, tokenized securities, insider activity, and fraud. Once managerial dependence ends, the token could move into a CFTC-led spot-market framework.