Senate Draft Assigns CFTC Exclusive Control of Spot Crypto

The draft CLARITY Act grants the Commodity Futures Trading Commission exclusive jurisdiction over spot digital commodity sales. This move separates the spot market from the Securities and Exchange Commission's primary oversight. The bill requires exchanges, brokers, and dealers in these markets to register with the CFTC. It also mandates that customer assets remain the property of the client. Intermediaries are barred from commingling these funds with their own.

The legislation combines language from House Bill 3633 and Senate Bill 3755. It establishes a federal regulatory framework for cryptocurrency activities. According to GN markets/crypto (en-US), the proposal defines specific roles for federal agencies. It aims to clarify the legal status of digital assets in the United States. The text addresses both market structure and consumer protection.

Officials Banned From Digital Asset Issuance

The bill prohibits the president, vice president, and members of Congress from issuing digital assets. It also bars them from sponsoring such assets in exchange for consideration. This restriction applies to other covered government officials as well. Violations carry penalties including disgorgement of profits. The enforcement architecture includes federal action by the U.S. attorney general.

State attorneys general may seek injunctive relief if residents are harmed. The proposal ensures that public officials cannot exploit their positions for personal gain in the crypto sector. This rule creates a clear ethical boundary for elected leaders. It seeks to prevent conflicts of interest in the new regulatory environment.

Exemptions Require SEC Disclosure Filings

Originators can raise no more than 200 million dollars under the exemption. They must file disclosures with the SEC to qualify. Digital asset service providers may fulfill these requirements in certain circumstances. The disclosure obligation is waived if an issuer certifies minimal entrepreneurial efforts. This certification is effective if the SEC issues no objection within 90 days.

Issuers must prove that managerial efforts were not a primary factor in asset value. This condition prevents the use of the exemption for active business operations. The 90-day window allows regulators to review the certification. It balances ease of access with regulatory oversight. This mechanism reduces the administrative burden on small issuers.

Banks Gain Digital Asset Custody Rights

The draft allows banks to provide digital asset custody services. They may also collateralize loans with digital assets. Banks can facilitate clients' secondary-market transactions. This inclusion brings traditional financial institutions into the crypto ecosystem. It standardizes the treatment of digital assets alongside other financial products.

The proposal restricts third-party payments on stablecoin balances. It bars payments that are economically equivalent to deposit interest. This provision protects community bank deposits from yield-driven outflows. The Treasury Secretary can implement rules to prevent detrimental impacts. This restriction applies if the yield causes substantial harm within 18 months.