A Decade-Long Tug of War Finally Concludes: "Cryptocurrency Market Structure Bill" Heads to Senate

Original Title: "Security or Commodity? Ten-Year Tug of War Ends, 'Cryptocurrency Market Structure Act' Heads to Senate"

Original Author: Ding Dang, Odaily

On December 10, U.S. Senators Gillibrand and Lummis stated at the Blockchain Association Policy Summit that the "Cryptocurrency Market Structure Act (CLARITY Act)" is expected to release a draft this weekend and enter the amendment and hearing voting stage next week. This means that this long-awaited legislative project is officially entering a decisive window.

The bill was first formally introduced in the U.S. House of Representatives on May 29, 2025, by House Financial Services Committee Chair Patrick McHenry and Digital Assets and Innovation Subcommittee Chair French Hill. It passed the House on July 17 by an overwhelming majority (294 votes in favor) and is currently awaiting final Senate review.

Core Design of the Bill: Classification Rather Than One-Size-Fits-All

The core of the "Cryptocurrency Market Structure Act" lies in its attempt to end the ten-year tug of war between U.S. regulatory agencies and the industry over "whether it is a security or a commodity." It is the first time that a clear boundary has been drawn for digital assets in legislative form, avoiding a "one-size-fits-all" regulatory approach and instead adopting a classification regulatory framework. Specifically:

Lega Distinction Between "Digital Commodity" and "Digital Security"

The bill clearly defines the vast majority of tokens issued natively on decentralized blockchains as "digital commodities" and transfers regulatory authority to the Commodity Futures Trading Commission (CFTC); only tokens that meet the Howey test and exhibit typical "investment contract" characteristics will continue to be regulated by the SEC under securities regulations.

Exemption Pathway for "Mature Blockchains"

To avoid all tokens being forcibly classified as securities, the bill establishes a "mature blockchain system" standard: when a blockchain satisfies both "high decentralization" (where no single entity controls over 20% of the token supply or validation power and the network's value primarily comes from actual usage) it can exempt SEC from security registration requirements. This provides a clear pathway for mainstream assets like Bitcoin and Ethereum, ensuring that regulation does not stifle technological progress.

Secondary Market Fully Shifts to CFTC Regulation

The bill requires all platforms engaged in digital commodity spot or derivative trading to register with the CFTC as a "Digital Commodity Exchange" (DCE), digital commodity broker, or dealer. Considering the industry reality, the bill also specifically establishes a 360-day "temporary registration" pathway to ensure that existing compliant platforms will not be forced to shut down due to technical violations during the transition period, thus achieving a smooth transition.

Limited Financing Exemption

Even for initial token offerings on mature blockchains that are still considered "investment contracts," issuers can apply for an exemption from the registration requirements of the 1933 Securities Act, but the annual fundraising total cannot exceed $75 million and must fulfill more stringent disclosure obligations. This design aims to strike a balance between encouraging innovation and protecting investors.

Division of Labor Between CFTC and SEC: From Confrontation to Collaboration

For a long time, the ongoing tug-of-war between the SEC and CFTC over jurisdiction of digital assets has been described by the industry as the "Achilles' heel" of the crypto industry. Regulatory uncertainty has even been considered a significant hidden cost suppressing domestic innovation in the United States. If the "Cryptocurrency Market Structure Act" is formally enacted, it will legislatively end this situation, establishing a clear division of responsibilities: the CFTC will become the core regulator of the secondary market for digital commodities, while the SEC will focus on token issuances and private placements that still exhibit security-like attributes in the primary market.

To ensure that the two agencies maintain coordination in cross-over areas, the bill requires the establishment of a permanent "Joint Advisory Committee." Either party must formally respond to non-binding recommendations made by the committee when formulating rules that may affect the jurisdiction of the other party. This mechanism aims to prevent future regulatory vacuums or duplicative regulation.

At the same time, the bill provides clear protection for the decentralized finance ecosystem: front-end protocol developers, node validators, miners, and other non-custodial, nonprofit roles will be explicitly excluded from the definitions of "broker" or "dealer," significantly reducing compliance burdens at the protocol level and preserving reasonable space for technological innovation.

Simultaneous Implementation of Supporting Actions: CFTC is "Taking the Lead"

As the Senate review of the "Cryptocurrency Market Structure Act" enters a critical stage, on December 5th, Acting Chairman of the U.S. Commodity Futures Trading Commission (CFTC) Caroline D. Pham announced that spot cryptocurrency products would be permitted for trading on CFTC-regulated futures trading platforms for the first time.

Pham stated that this move is part of the Trump administration's effort to establish the U.S. as the "Crypto Capital of the World," aiming to address the lack of protections on offshore trading platforms by providing a regulated domestic market.

Additionally, as part of the "Crypto Sprint" initiative, the CFTC will also promote the use of tokenized collateral (including stablecoins) in the derivatives market and amend rules to support the application of blockchain technology in infrastructure such as clearing and settlement. This effort will enhance the CFTC's leadership role in the digital asset space, aligning closely with the spirit of the legislation.

Trump Nomination Fast-Track: Crypto-Friendly Leadership in Place

Since Trump's second term, the personnel layout of major U.S. financial regulatory agencies has continued to lean towards supporting digital assets, becoming a key catalyst for the accelerated development of the crypto industry.

Securities and Exchange Commission (SEC) Chairman Paul Atkins, in an interview with CNBC, stated that the U.S.'s "resistance" to cryptocurrency has been "for too long." Atkins, appointed by Trump, took office in 2025. He views the "Crypto Market Structure Act" as part of "Project Crypto," aimed at bringing order and fairness to the classification of digital assets through legislation and rules.

At the same time, on October 25, 2025, Trump nominated Brian Quintenz to serve as CFTC Chairman and Commissioner. Quintenz, a former crypto lawyer, represented several crypto companies at the Willkie Farr & Gallagher law firm (such as venture capital funds and blockchain projects) and has been serving as Chief Legal Advisor to the SEC's Crypto Task Force since March 2025, reporting directly to Atkins.

Trump also nominated Travis Hill to serve as Chairman of the Federal Deposit Insurance Corporation (FDIC), having already served as Acting Chairman in 2025. Hill is also crypto-friendly, publicly supporting banks entering crypto custody and stablecoin issuance, believing this can enhance financial inclusion. The FDIC serves as the interface between banks and crypto (such as stablecoin issuers), and his appointment may facilitate banks' entry into the crypto space.

Following the government's resumption of operations, the SEC has also introduced a series of institutional optimization schemes to expedite ETF approval processes. The overall signal is crystal clear: regulatory logic is transitioning from defensive management to structural acceptance.

Conclusion: The U.S. is Filling in the "Crypto Rule of Law Puzzle"

More importantly, the advancement of the "Cryptocurrency Market Structure Act" may solidify the effectiveness of the "American Stablecoin Innovation Act" signed by Trump earlier this year, which has provided a secure framework for stablecoin issuance. This bill further complements the legislative puzzle of the crypto industry, filling in market structure gaps, and propelling the United States from a "follower" to a "leader" in global crypto regulation.

Overall, these policies and personnel changes foreshadow a structural opportunity for the U.S. crypto ecosystem, where regulatory clarity may attract more institutional funding. However, challenges have not disappeared, such as coordinating DeFi regulatory details and aligning with international standards. But for global crypto practitioners, this is not just a U.S. story, but a crucial window of opportunity for the entire industry.

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