Securities or Commodities? Crypto Market Structure Bill Advances to the Senate

The U.S. Crypto Market Structure Bill is moving toward final Senate review, aiming to end the decade-long securities-versus-commodities debate by establishing a clear, classification-based regulatory framework for digital assets.

On December 10, U.S. Senators Kirsten Gillibrand and Cynthia Lummis stated at the Blockchain Association Policy Summit that the Crypto Market Structure Bill (CLARITY Act) is expected to release its draft by the end of this week and enter the revision, hearing, and voting phase in the Senate next week. This signals that the long-anticipated legislative effort has formally entered a decisive window.

The bill was first formally introduced in the U.S. House of Representatives on May 29, 2025, jointly proposed by House Financial Services Committee Chairman Patrick McHenry and Digital Assets, Financial Technology, and Innovation Subcommittee Chairman French Hill. On July 17, it passed the House with an overwhelming majority (294 votes in favor) and is now awaiting final consideration by the Senate.

CORE DESIGN OF THE BILL: CLASSIFICATION RATHER THAN A ONE-SIZE-FITS-ALL APPROACH

The core objective of the Crypto Market Structure Bill is to bring an end to the decade-long tug-of-war between U.S. regulators and the industry over whether digital assets should be treated as securities or commodities. For the first time, the bill seeks to establish clear statutory boundaries for digital assets, avoiding a blanket regulatory approach and instead adopting a classification-based regulatory framework. Specifically:

Statutory Distinction Between “Digital Commodities” and “Digital Securities”

The bill explicitly defines the vast majority of tokens natively issued on decentralized blockchains as “digital commodities” and assigns their regulatory oversight to the Commodity Futures Trading Commission (CFTC). Only tokens that meet the Howey Test and exhibit the typical characteristics of an “investment contract” would continue to be regulated by the Securities and Exchange Commission (SEC) under securities laws.

“Mature Blockchain” Exemption Pathway

To prevent all tokens from being automatically classified as securities, the bill establishes a standard for “mature blockchain systems.” When a blockchain meets criteria such as a high degree of decentralization—where no single entity controls more than 20% of the token supply or validation power, and where the token’s value is primarily derived from actual network usage—it may qualify for an exemption from SEC securities registration requirements. This provides a clear regulatory pathway for major assets such as Bitcoin and Ethereum, ensuring that regulation does not stifle technological progress.

Secondary Markets Shift Fully to CFTC Oversight

The bill requires all platforms engaged in spot or derivatives trading of digital commodities to register with the CFTC as Digital Commodity Exchanges (DCEs), digital commodity brokers, or dealers. Taking industry realities into account, the bill also establishes a transitional “temporary registration” pathway of up to 360 days, ensuring that existing compliant platforms are not forced to shut down due to technical non-compliance during the transition period, thereby enabling a smooth regulatory shift.

Limited Fundraising Exemptions

Even for initial token offerings conducted on mature blockchains, if the tokens are still deemed to be “investment contracts,” issuers may apply for an exemption from the registration requirements of the Securities Act of 1933. However, the total annual fundraising amount may not exceed USD 75 million, and issuers must comply with enhanced disclosure obligations. This design seeks to strike a balance between encouraging innovation and protecting investors.

DIVISION OF LABOR BETWEEN THE CFTC AND SEC: FROM CONFRONTATION TO COORDINATION

For years, the persistent jurisdictional struggle between the SEC and the CFTC over digital assets has been described by the industry as the crypto sector’s “Achilles’ heel.” Regulatory uncertainty has even been viewed as a significant hidden cost suppressing domestic innovation in the United States. If enacted, the Crypto Market Structure Bill would legislatively put an end to this situation by establishing a clear division of responsibilities: the CFTC would become the primary regulator of digital commodity secondary markets, while the SEC would focus on token issuance and private placements in the primary market that retain securities characteristics.

To ensure coordination between the two agencies in overlapping areas, the bill mandates the establishment of a permanent “Joint Advisory Committee.” When either agency formulates rules that may affect the other’s jurisdiction, it must formally respond to the committee’s non-binding recommendations. This mechanism is intended to prevent future regulatory gaps or duplicative oversight.

At the same time, the bill provides explicit protections for the decentralized finance (DeFi) ecosystem. Non-custodial, non-profit participants—such as protocol front-end developers, node validators, and miners—are explicitly excluded from the definitions of “broker” or “dealer,” significantly reducing compliance burdens at the protocol level and preserving reasonable space for technological innovation.

PARALLEL DEVELOPMENTS: THE CFTC MOVES TO “IMPLEMENT AHEAD OF TIME”

As the Crypto Market Structure Bill enters a critical phase of Senate consideration, on December 5, Acting CFTC Chair Caroline D. Pham announced that spot crypto products will, for the first time, be permitted to trade on CFTC-registered, regulated futures exchanges.

Pham stated that this move is part of the Trump administration’s plan to make the United States the “crypto capital of the world,” aiming to address the lack of protections associated with offshore exchanges by providing regulated domestic markets.

In addition, as part of the “Crypto Sprint” initiative, the CFTC will promote the use of tokenized collateral—including stablecoins—in derivatives markets and revise rules to support the application of blockchain technology in clearing and settlement infrastructure. These efforts will further strengthen the CFTC’s leadership role in the digital asset space and are highly aligned with the spirit of the bill.

ACCELERATED TRUMP APPOINTMENTS: CRYPTO-FRIENDLY LEADERSHIP IN PLACE

Since the beginning of Trump’s second term, personnel appointments across major U.S. financial regulatory agencies have increasingly favored support for digital assets—a shift that has become a key catalyst for the acceleration of the crypto industry.

SEC Chair Paul Atkins stated in an interview with CNBC that U.S. resistance to cryptocurrencies has lasted “far too long.” Atkins, appointed by Trump and taking office in 2025, views the Crypto Market Structure Bill as part of “Project Crypto,” an initiative aimed at bringing order and fairness to digital asset classification through legislation and rulemaking.

Meanwhile, on October 25, 2025, Trump nominated Brian Quintenz to serve as Chair and Commissioner of the CFTC. A former crypto attorney, Quintenz previously represented multiple crypto companies—including venture capital funds and blockchain projects—at Willkie Farr & Gallagher. Since March 2025, he has served as Chief Legal Advisor to the SEC’s Crypto Task Force, reporting directly to Atkins.

Trump also nominated Travis Hill as Chair of the Federal Deposit Insurance Corporation (FDIC), where he has served as Acting Chair since 2025. Hill is also considered crypto-friendly and has publicly supported banks’ involvement in crypto custody and stablecoin issuance, arguing that such activities enhance financial inclusion. As the primary interface between banking regulation and crypto activities (such as stablecoin issuers), the FDIC under his leadership may facilitate banks’ entry into the crypto sector.

Following the resumption of normal government operations, the SEC has also rolled out a series of procedural optimizations to accelerate ETF approval timelines. The overall signal is clear: the regulatory approach is shifting from defensive management to structural acceptance.

CONCLUSION: THE UNITED STATES IS COMPLETING THE “CRYPTO RULE-OF-LAW PUZZLE”

More importantly, the advancement of the Crypto Market Structure Bill may reinforce the effects of the U.S. Stablecoin Innovation Act signed by Trump earlier this year, which has already provided a safety framework for stablecoin issuance. Together, these efforts further complete the legislative puzzle for the crypto industry, filling gaps in market structure and propelling the United States from a global crypto regulatory “follower” to a “leader.”

Overall, these policy and personnel developments signal structural opportunities for the U.S. crypto ecosystem, as greater regulatory clarity may attract increased institutional capital. Challenges remain, however, including the coordination of DeFi regulatory details and alignment with international standards. For global crypto practitioners, this is not merely an American story, but a critical window period for the entire industry.