CRS Describes Potential Effects of CLARITY Act on SEC Jurisdiction
The Congressional Research Service ("CRS") reviewed the potential effects of the Digital Asset Market Clarity Act of 2025 ("H.R. 3633") on SEC jurisdiction. CRS concluded that the bill, which provides a "maturity-based framework" for determining whether digital assets remain securities or commodities, would narrow SEC jurisdiction over digital assets.
According to the CRS, the CLARITY Act would limit the SEC's role in digital asset markets to the initial offering and fundraising stage. The bill allows issuers to self-certify to the SEC that a digital asset is either already "mature" or expected to become so within four years. Maturity is based on factors such as decentralization, market utility and ownership concentration. The SEC would be authorized to review and object to these certifications and would be required to promulgate rules regarding consequences for failing to achieve the declared maturity.
The CRS stated that the bill also creates a new exemption from the Securities Act of 1933 for issuers offering digital commodities on mature blockchains. An issuer may raise up to $75 million over a 12-month period, provided they meet specific disclosure obligations. This exemption applies regardless of investor income or net worth. CRS highlighted that this structure is modeled in part on the SEC's Regulation A Tier 2 framework, but applies specifically to digital assets and incorporates technology-specific disclosures.
The CRS emphasized that while the SEC's general regulatory jurisdiction over digital commodities would be curtailed, the agency would retain limited authority in key areas: (i) the SEC could continue to pursue civil enforcement actions for violations involving digital assets, including permitted stablecoins; (ii) the SEC would maintain regulatory authority over registered broker-dealers and alternative trading systems engaged in digital asset activity, provided its rules do not conflict with those of the CFTC; and (iii) the SEC would maintain authority over digital asset offerings on blockchains that are not deemed mature.
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