U.S. Clarifies Crypto Rules as SEC Considers Tokenized Stocks

The Senate Banking Committee voted this week to advance the CLARITY Act, a bill that would set a statutory test for whether a digital asset is regulated as a security by the U.S. Securities and Exchange Commission or as a commodity by the Commodity Futures Trading Commission. The committee approved the measure in Washington and sent it toward possible floor consideration in the Senate.

Under the bill’s framework, regulatory responsibility would be assigned based on the characteristics of particular tokens and trading activity rather than relying only on individual agency enforcement decisions. Lawmakers backing the bill said the aim is to reduce uncertainty for exchanges, developers and investors by clarifying which regulator has authority over specific products.

Separately, the SEC is drafting an “innovation exemption” that could allow crypto platforms to offer trading in tokenized shares-digital representations of traditional equities-without full registration under current securities rules. The agency is working on the scope and conditions of the exemption, including which platforms and instruments could qualify and what investor protections would apply.

Federal officials and enforcement agencies are also increasing attention to national-security and sanctions issues tied to cross-border crypto flows. Investigations and reviews are examining whether exchanges, blockchain networks and ventures with political links have been used to move funds across borders or to evade sanctions. Those inquiries have informed policy discussions and enforcement priorities.

The Commodity Futures Trading Commission filed a federal lawsuit against the state of Minnesota challenging a new law that criminalizes operators and users of certain event-contract platforms. The CFTC argued the state statute intrudes on the agency’s exclusive authority over federally regulated derivatives and said the law could be preempted by federal statute. The case is pending in federal court.

The U.S. Court of Appeals for the D.C. Circuit heard oral argument in the appeal of a conviction connected to the Bitcoin Fog mixing service. Defense attorneys argued that prosecutors improperly manufactured venue by relying on undercover access based in Washington to a service that operated outside the United States. The appeal raises questions about the scope of U.S. criminal jurisdiction over services accessible from the United States but hosted or operated abroad.

The SEC rescinded Rule 202.5(e), ending a long-standing policy that had required settling defendants to refrain from publicly denying enforcement allegations. The agency’s removal of the non-denial clause means parties can settle with the SEC while still disputing the agency’s claims in public statements.

The CLARITY Act now moves toward broader Senate consideration. The SEC’s drafting process will determine the final terms of any tokenized-stock exemption. The CFTC lawsuit and the pending criminal appeal remain active and could affect how courts and regulators address jurisdiction and federal preemption in digital-asset matters.