A legislative proposal circulating in Washington could offer a path to regulatory certainty for some of the crypto industry’s longest-running projects, potentially ending a decade of legal battles with the U.S. Securities and Exchange Commission (SEC).
The proposal, titled the Clarity Act, would hard-code into federal law what is currently only non-binding guidance, creating a specific legal framework for established, decentralized cryptocurrency networks. MicroStrategy’s Michael Saylor pointed to the act during a recent CNBC interview as a key element for wider blockchain adoption. The bill is reportedly being framed for a possible signing around the fourth of July, according to policy analysts tracking the legislation.
For years, the SEC has pursued a strategy of “regulation by enforcement,” bringing lawsuits against crypto firms for allegedly offering unregistered securities. The most prominent case involves Ripple Labs, which has been in a legal fight with the SEC since 2020 over the classification of its XRP token. This approach has created significant uncertainty for projects like XRP, Cardano (ADA), Hedera (HBAR), and Stellar (XLM), which the SEC has previously signaled could be securities.
If passed, the Clarity Act would provide a clear legal safe harbor, defining the characteristics of a sufficiently decentralized network that would not be subject to securities law. This could lead to a significant re-evaluation of the affected assets by removing the legal overhang that has suppressed investor confidence and exchange listings in the United States.
A New Regulatory Blueprint
The Clarity Act does not exist in a vacuum. It follows a pattern of growing legislative engagement with the digital asset space, aimed at creating a more predictable U.S. regulatory environment. The framework shares conceptual similarities with the GENIUS Act, a comprehensive stablecoin law that passed with broad bipartisan support and established clear rules for issuers.
That move toward creating clear rules before a crisis, rather than in reaction to one, is gaining traction. The National Bank of Georgia recently worked with Tether to create a government-backed stablecoin, GEL₮, under a legal framework designed for compatibility with the U.S. GENIUS Act. This signals a global trend toward aligning with clear, U.S.-led regulatory standards. By providing a definitive answer to the question of whether these long-standing tokens are securities, the Clarity Act could end the current cycle of lawsuits and allow the industry to move forward with a clear set of rules.
This article is for informational purposes only and does not constitute investment advice.
