US House of Representatives passes CLARITY Act to regulate cryptocurrencies

The United States House of Representatives formally passed the landmark Digital Asset Market Structure Clarity Act (CLARITY), designed to address long-standing confusion over the classification of cryptocurrencies in the US financial system.

The bill formally divides regulatory oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), defining digital currencies as either securities or “digital commodities.” Under the new structure, the SEC will oversee tokens that meet the criteria for securities. The CFTC would have jurisdiction over “digital commodities.”

The bill also attempts to define “sufficient decentralization.” As the text of the document specifies, a blockchain with transparent, public operations without individual control can be considered a commodity. However, critics argue that the bill still leaves ambiguities in cryptocurrency regulation, especially in the area of decentralized finance (DeFi).

The bill's passage comes just days after bitcoin reached a new record at the level higher than $120,000.