Crypto Policymaking Overhaul Unfolds as Digital Asset Market Clarity Act Looms

A new wave of crypto policymaking is on the horizon, and industry participants would be wise to prepare now. The Digital Asset Market Clarity Act, currently pending in the Senate, would trigger a major regulatory overhaul, with more than 40 mandates spanning five agencies and deadlines clustering between 270 and 360 days after enactment.

The Securities and Exchange Commission (SEC) would bear the heaviest burden, required to complete rulemaking under the new Section 4B within 360 days. This includes adopting rules on disclosure requirements for network tokens whose value depends on central efforts of its originator, known as 'ancillary assets.'

Regulation Crypto, a framework that would exempt certain transactions involving tokens meeting the definition from full securities registration requirements, is also expected to be a key focus area for the SEC. Originators would be required to file initial disclosures 30 days before the first sale and semiannual disclosures thereafter.

The bill's provisions require joint action by the SEC and Commodity Futures Trading Commission or, by the SEC, CFTC, and Treasury Department together on several significant areas, including portfolio margining, intermediary disclosure, micro-innovation sandbox, and stablecoin yield. The Financial Crimes Enforcement Network would also issue Bank Secrecy Act requirements for digital commodity brokers, dealers, and exchanges.