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1 1 (July 10, 2025)

handle is hein.crs/drpihp0001 and id is 1 raw text is: Congressional A Research Service informing the legislaive debate since 1914____________________ Crypto Legislation: CLARITY Act's (H.R. 3633) Potential Effects on SEC Jurisdiction July 10, 2025 The Digital Asset Market Clarity Act of 2025 (CLARITY, H.R. 3633) passed the House Committees on Financial Services and Agriculture on June 10, 2025. The bill aims to transform digital asset regulatory landscape and redefine the regulatory roles at the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). This Insight focuses on discussions of the SEC's jurisdiction. For an overview of CLARITY, see CRS Insight IN12583, Crypto Legislation: An Overview ofH.R. 3633, the CLARITYAct, by Paul Tierno. SEC's Existing Regulatory Framework The SEC is the primary regulator overseeing digital and traditional security offerings, trading, and investment activities. The current regulatory framework at the SEC is technology neutral, meaning securities regulation generally applies to all securities whether they are digital or traditional. The SEC's regulatory framework generally aligns with its mission to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. For more details, see CRS Report R48521, Capital Markets and Securities Regulation: Overview and Policy Issues, by Eva Su. For digital assets that are securities, the SEC has both (1) regulatory authority, including over digital asset securities, which include registration requirements, disclosure requirements, and market oversight; and (2) enforcement authority that allows it to bring civil enforcement actions, such as anti-fraud and anti- manipulation actions, for securities laws violations. SEC Chair Paul S. Atkins stated that the agency plans to develop new regulatory approaches for digital assets. The SEC's Crypto Task Force, formed in January 2025, is leading this effort. Legislative Context Not all digital assets are legally classified as securities, and thus they may not fall under the securities regulation regime. Digital assets may also be commodities under the Commodity Exchange Act (P.L. 74- 675). In such cases, they are subject to the jurisdiction of the CFTC, which generally extends to Congressional Research Service https://crsreports.congress.gov IN12584 CRS INSIGHT Prepared for Members and Committees of Congress