SEC-CFTC Crypto Framework Gains Momentum as CLARITY Act Stalls

The SEC and CFTC are moving forward with a new framework for classifying digital assets as efforts to pass the CLARITY Act remain stuck in Congress.

The regulators have issued joint guidance that divides digital assets into five groups: digital commodities, digital collectibles, digital tools, stablecoins and digital securities.

The new system gives crypto exchanges, issuers and traders a clearer indication of how different assets could be treated under U.S. law. However, the framework is based on regulatory interpretation rather than legislation, leaving it less permanent than rules established by Congress.

The announcement comes as crypto markets prepare for the latest U.S. CPI data. Bitcoin is hovering around $64,000, and traders are watching the inflation figures for a possible catalyst that could end the cryptocurrency’s current period of consolidation.

Regulators Establish an Interim Crypto Taxonomy

Under the SEC-CFTC framework, digital commodities, digital collectibles, digital tools and stablecoins generally fall outside securities regulation. Digital securities remain the category most directly associated with SEC oversight.

The SEC has also stated that it may exercise jurisdiction over individual assets that are otherwise classified as nonsecurities, depending on their specific characteristics and circumstances.

That caveat means the framework does not completely settle the jurisdictional questions facing the crypto industry. Those unresolved issues are a major reason lawmakers have been pursuing comprehensive market-structure legislation.

The CLARITY Act is intended to create statutory boundaries between the SEC and CFTC. Until Congress reaches an agreement, however, the agencies’ joint guidance provides a practical interim framework.

Ian Katz, managing partner at Capital Alpha, said regulators are continuing to work on the issue rather than waiting indefinitely for Congress. The lengthy legislative process makes it difficult for agencies to simply pause their efforts.

SEC Chair Paul Atkins made a similar case at the DC Blockchain Summit, describing the guidance as a necessary step toward resolving long-standing uncertainty.

Atkins has also discussed a broader regulatory structure that could include exemptions for startups and fundraising, along with a safe harbor for crypto assets that eventually mature beyond securities treatment. Permanent changes of that kind would generally require legislation.

Senate Negotiations Keep CLARITY Act on Hold

The House passed the CLARITY Act last July, but the legislation has faced a more difficult path in the Senate.

The Senate Agriculture Committee has advanced its section without Democratic support, while the Banking Committee has encountered its own challenges, including the withdrawal of Coinbase’s backing.

Stablecoin rewards remain one of the most contentious issues. Banks favor tighter restrictions, while crypto companies argue that limiting reward programs could make digital assets less competitive with traditional financial products.

President Trump has criticized banks over their handling of the GENIUS Act and has urged Congress to accelerate efforts to establish broader crypto market rules.

Senators Angela Alsobrooks and Thom Tillis have reportedly reached a bipartisan agreement concerning stablecoin rewards, although the precise details remain unclear.

David Carlisle of Elliptic said the SEC-CFTC guidance provides additional reassurance to market participants while the legislative process remains unresolved.

What the Next Phase Could Look Like

The CLARITY Act still faces multiple hurdles even if the Senate moves forward. Lawmakers would need to reconcile the Banking Committee’s version with the Agriculture Committee’s bill, secure the 60 votes necessary for Senate passage and then work with the House on a final version.

The approaching midterm elections could further limit the time available for Congress to complete the legislation, making a timely agreement increasingly important.

Sen. Bernie Moreno has warned that failing to pass the CLARITY Act by May could push comprehensive digital-asset legislation further into the future.

For crypto investors and businesses, the distinction between agency guidance and legislation is critical. The SEC and CFTC can change their interpretations without a congressional vote, while statutory rules generally provide a more durable foundation.

The latest framework therefore gives the industry a clearer short-term regulatory roadmap, but it does not replace congressional action. Until the CLARITY Act or another market-structure bill becomes law, regulatory uncertainty will remain a major consideration for crypto markets and institutional investors.