The full text of the CLARITY Act, a major crypto market structure bill, is now public, drawing significant attention from the digital asset community. Crypto analyst BankXRP described the legislation as the most comprehensive of its kind written by Congress, highlighting its focus on federal rules, investor protections, and anti-crime measures.
Regulatory division between SEC and CFTC
Under the proposed law, regulatory responsibilities for cryptocurrencies will be divided between the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The bill specifies that tokens associated with centralized development teams will remain under SEC oversight as investment contract assets, while tokens operating on sufficiently decentralized networks will be managed by the CFTC as digital commodities.
Crypto analyst BankXRP pointed out, “Clear federal rules, real protections for US holders, and the strongest anti-crime tools yet” are included in the bill.
Mini dictionary: CFTC, or Commodity Futures Trading Commission, is an independent US government agency that regulates futures and options markets including commodities and, increasingly, digital assets that are classified as commodities.
Key investor and consumer protections
The CLARITY Act includes explicit provisions barring digital commodity exchanges from treating customer assets as property of the exchange. If an exchange receives customer funds or assets, it cannot use or dispose of them for its own purposes. The bill also amends US bankruptcy law to require that, in the event of an exchange collapse, customer assets must be distributed as specified, addressing protections that were not available during major platform failures such as FTX’s bankruptcy.
In addition, federal agencies are not permitted to block US citizens from self-custody of digital assets in self-hosted wallets for any lawful activity, further solidifying individual rights within the digital asset space.
Combating fraud and illicit finance
Digital asset intermediaries will be obligated to provide educational materials to clients, explaining how blockchain and distributed ledger systems work, clarifying the differences from traditional markets, and outlining how to identify and report fraud. All intermediaries in the sector will be required to comply with the Bank Secrecy Act, adhere to anti-money laundering (AML) rules, follow regulations for digital asset kiosks, and implement cybersecurity and sanctions protocols.
Information sharing on potential cases of illicit finance will be facilitated among designated federal agencies and private sector entities. The bill includes targeted provisions for monitoring and regulating the use of privacy-focused technologies, such as mixers and tumblers, frequently linked to anonymized transactions.
Mini dictionary: Mixers and tumblers are services that blend multiple cryptocurrency transactions together, making it difficult to trace the original source or destination of funds. These tools have attracted scrutiny from regulators for their role in facilitating anonymous transfers.
Developer protections
The legislation also seeks to protect software and infrastructure developers operating in the blockchain space. Developers who do not exercise control over networks will not be classified as money transmitters solely for developing software, supplying hardware to enable self-custody, or maintaining decentralized infrastructure. The bill ensures these protections for the developer community, while maintaining regulatory authority to counteract fraud and market manipulation.
Ethics and government oversight
A separate section of the bill responds to ongoing ethics concerns. It would prohibit the president, vice president, members of Congress, federal judges, and their spouses from launching or promoting digital assets in exchange for compensation while holding office. Additionally, officials covered by the statute would be required to divest their crypto holdings or transfer them into a blind trust.
However, there is disagreement among lawmakers. Some Democrats oppose assigning sole enforcement powers to the Department of Justice, calling instead for authority to also rest with state attorneys general, citing the department’s direct link to the presidency as a conflict regarding the bill’s restrictions.
Senate timeline and next steps
The United States Senate is set to begin its recess in approximately two weeks, giving lawmakers a brief window to advance the CLARITY Act. The bill requires 60 votes for passage. Both XRP holders and other participants in the digital asset market are closely monitoring the outcome, as a missed deadline could push consideration of the bill into 2030.
