Grayscale: CLARITY Act would shift crypto oversight

On May 7, Grayscale argued the CLARITY Act would move crypto oversight from enforcement-based actions to formal rulemaking, placing investment contracts under the Securities and Exchange Commission and digital commodities under the Commodity Futures Trading Commission. The firm said the change would reduce regulatory uncertainty for developers, investors, brokers and custodians.

Zach Pandl, Grayscale’s head of research, described the proposal as a market-structure bill that draws a line between investment contracts and digital commodities. He wrote that regulation over the past decade has relied more on enforcement than on formal rulemaking, and cited tens of billions of dollars in regulatory fines and examples of potential participants avoiding the market because of legal risk.

Grayscale outlined how different market participants would be affected. Developers would receive clearer guidance to structure and launch projects. Investors would face less uncertainty over ownership and project outlook. Trading venues, brokers and custodians would have more defined registration paths. Token issuers would see specified requirements for distribution and ongoing compliance.

Public pressure has entered the Senate debate. A group delivered a petition with more than 28,000 signatures to the Senate Banking Committee on April 30 urging a markup of H.R.3633, the Digital Asset Market Clarity Act of 2025. The committee scheduled an executive session for May 14 to consider the bill.

A survey released May 7 found 52% of voters supported the bill after reading a neutral summary, while 70% said the United States should already have passed clear crypto legislation. Pandl referenced Polymarket odds that put the CLARITY Act’s chance of passage in 2026 at about 67%, and noted the bill still must clear the Banking Committee, pass the full Senate and win approval from both chambers.

Pandl wrote, “The CLARITY Act matters because for much of the past decade, digital asset regulation has been shaped primarily through enforcement rather than formal rulemaking.”

Supporters say the bill would formalize regulator roles and create clearer compliance standards. Critics have raised questions about how specific tokens would be classified and how new rules would interact with existing statutes and court decisions. The bill’s progress in the Senate will determine whether federal oversight of digital assets moves toward a statutory framework or remains driven by enforcement actions.