US Crypto Regulation Shifts as Bill Advances
A major crypto bill, the Clarity Act, is advancing through the U.S. Senate, aiming to shift oversight from the SEC to the more crypto-friendly CFTC. In a related move, the SEC has reportedly removed crypto from its 2026 priorities, signaling a potential thaw in regulatory pressure that could unlock significant capital.
The Digital Asset Market Clarity Act of 2025, or CLARITY Act, passed the House of Representatives in July 2025 with bipartisan support (294-134) and is now navigating the Senate. The legislation aims to provide a clear regulatory framework for digital assets, a significant departure from the "regulation by enforcement" approach of the past. A central goal of the CLARITY Act is to delineate the jurisdictions of the SEC and the CFTC. The bill proposes giving the CFTC authority over "digital commodities," while the SEC would continue to oversee digital assets that are considered securities. This move is intended to provide much-needed legal clarity for crypto innovators and eliminate reliance on offshore structures. Progress in the Senate has been complex, with the Banking and Agriculture committees drafting their own versions of the bill. A planned markup of the bill was delayed in January 2026 after some key industry participants withdrew their support for the revised text. However, recent discussions between major banks and crypto industry leaders indicate renewed momentum towards reaching a consensus. The perceived shift at the SEC is more nuanced than a simple deprioritization of crypto. While the Division of Examinations' 2026 priorities list does not have a standalone section for crypto, this is seen as a move away from an adversarial posture. Crypto-related activities may now be reviewed under broader categories such as cybersecurity and anti-money laundering. Under its new leadership, the SEC has launched "Project Crypto," an initiative aimed at making the U.S. the "crypto capital of the world." SEC Chair Paul Atkins has stated that establishing a clear regulatory framework for crypto assets is a top priority for 2026. This initiative is focused on creating clear guidelines for when a digital asset is a security, modernizing custody rules, and even introducing safe harbors for offerings like ICOs. The new SEC leadership has signaled a significant change in tone, criticizing the previous administration's heavy reliance on enforcement actions. Chair Atkins and Commissioner Hester Peirce have emphasized a more collaborative approach, including working closely with the CFTC. This shift is intended to provide a predictable path for crypto firms and encourage innovation within the United States. At a recent event, Chair Atkins and Commissioner Peirce outlined their focus on investor protection through transparency and providing investors with reliable data. They also highlighted the exploration of pilot programs for on-chain trading of tokenized securities and joint rulemaking with the CFTC under the expanded "Project Crypto." The overall regulatory environment is moving from ambiguity to a more structured approach, with a growing consensus on the need for clear rules. This regulatory clarity is seen as a key factor in attracting further institutional investment and embedding digital assets into the broader financial infrastructure.
