Written by: Eric, Foresight News
On January 15th Beijing time, crypto journalist Eleanor Terrett reported that due to Coinbase's public opposition, the internal review of the "Digital Asset Market Clarity Act" (hereinafter referred to as the "CLARITY Act") originally scheduled for this Thursday by the U.S. Senate Banking Committee (hereinafter referred to as the "Banking Committee") was canceled, and the subsequent schedule has not been announced.
This Thursday was originally supposed to be the day for internal reviews by both the Senate Banking Committee and the Senate Agriculture Committee (hereinafter referred to as the "Agriculture Committee"). The latter was postponed to the end of the month due to disagreements between the two parties, while the former was just revealed today to have its review postponed with a follow-up schedule to be determined.
The Digital Asset Market Clarity Act (CLARITY Act) is a regulatory guide highly anticipated by all participants in the Web3 industry. Overall, the CLARITY Act aims to establish a clear regulatory framework for digital assets, determining "who to regulate, who regulates, and how broad the regulation is," addressing the years of模糊的监管边界 (fuzzy regulatory boundaries) and the problem of "using enforcement instead of regulation."
However, when the full text of the bill proposed by the Banking Committee was exposed, all industry participants were stunned: the bill imposes近乎苛刻的 (almost苛刻的/harsh) regulatory requirements on Web3 projects and related institutions. Whether exempt from registration or not, token financing, transfer, and sale all have strict regulations. Some industry participants jokingly said that this bill does not look like one drafted by a pro-cryptocurrency government at all; it更像是 (more like) a version the Harris administration would propose.
Who Drafts the Bill?
For readers who are not yet familiar with the CLARITY Act, here is a brief background introduction.
In July 2025, the U.S. House of Representatives passed the initial version of the CLARITY Act with a vote of 294 in favor and 134 against, and submitted it to the Senate. After the House vote, the market was once乐观估计 (optimistically estimated) that the bill would successfully pass the Senate before Thanksgiving 2025, or at the latest by the end of the year. However, the reality is that because the bill involves the division of regulatory authority between the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC), the Senate version will be drafted in parts by the Banking Committee, which oversees the SEC, and the Agriculture Committee, which oversees the CFTC. Each will conduct internal reviews, and after passing, they will be整合为 (integrated into) one bill and submitted for a full Senate vote.
For the CLARITY Act, the content drafted by the Banking Committee includes the definition of tokens, limiting the SEC's regulatory scope, registration and exemption clauses for Web3 projects, and some content involving banks and stablecoins; the content drafted by the Agriculture Committee includes the CFTC's regulatory scope, the rights and obligations of intermediaries such as exchanges, etc. As for why the Agriculture Committee is involved, it is because commodity futures originally only included agricultural products, so the CFTC was placed under the supervision of the Agriculture Committee. Even though futures品种扩展到了 (varieties expanded to) precious metals, energy, and even cryptocurrencies later, the U.S. government still has not changed the body supervising the CFTC.
Currently, the CLARITY Act is stuck on reaching consensus within the two committees. A basic version has not yet been agreed upon, and after that, the two committees still need internal deliberation and merger. There is a long way to go before entering the full Senate vote.
Why is the Bill "Harsh"?
Objectively speaking, this bill is喜闻乐见的 (welcome news) for retail investors; but for institutions and project parties that have spent real money on lobbying and invested significant effort in providing suggestions, it sets up numerous restrictions, which is far from the previously expected "encouragement of innovation."
New Definition of Tokens
In the bill's new definition of "tokens," the native tokens of public chains (e.g., ETH on Ethereum, SOL on Solana) are defined as "Network Tokens." Such tokens are not considered securities but need to disclose information according to regulations; tokens of DApps and other Web3 projects are defined as "Ancillary Assets," belonging to "investment contracts." Although they can be exempt from registration, there are also transfer restrictions and disclosure requirements.
Regarding NFTs, except for types such as artwork, tickets, and memberships, which are not considered securities, NFTs minted on a large scale and tradable, fractionalized NFTs, and NFTs representing the economic rights of underlying assets will all be considered securities. Under such terms, "blue-chip NFTs" including Pudgy Penguins and Moonbirds, which are recently about to issue tokens, would be considered securities.
As for tokenized securities such as stocks, the bill clearly requires that现行证券法一条不少地适用 (existing securities laws apply in full without exception). The bill only makes "adaptations" for technical details and absolutely does not open any loopholes for the securities attribute itself. All RWAs that meet the definition of securities cannot avoid regulation through tokenization, and the once popular U.S. stock tokenization trading platforms may also need to comply with broker-dealer regulatory requirements.
Although it is somewhat温和了一些 (milder) compared to the SEC's previous "everything is a security," the disclosure and transfer requirements are unexpectedly strict.
According to the bill's provisions, before a project is deemed "decentralized," the project needs to submit information to the SEC that needs to be disclosed at least 30 days before the token issuance, including company information, finances, token economic model, risk factors, etc. Disclosure is required every six months and must continue for 3 years. Only after submitting a "Termination Certification" confirming that the project has become "decentralized" can the disclosure stop.
In addition, before being deemed decentralized, affiliated persons (founders, employees, controllers) cannot transfer more than a specified number of tokens (specific quantity undetermined) within 12 months. After being certified as decentralized, affiliated persons still need to lock up their tokens for 6 months and cannot transfer more than 10% of the annual circulating supply in any 12-month period. The conditions for certifying decentralization include three aspects: whether the code is open source, whether token holding is sufficiently分散 (decentralized), and whether on-chain governance is effective. Specific数值 (numerical values) will be additionally specified by the SEC. After the project party submits an application, if the SEC directly certifies it or no objection is raised within 90 days, the application is deemed passed.
In summary, although many tokens are no longer considered securities, the disclosure obligations are very strict. Only after the project is certified as decentralized by the SEC can many restrictions be lifted. To date, a large number of projects will set up "liquidity incentive pools" or "community funds" accounting for more than 20% of the total issuance. According to the current bill requirements, project parties may have to wait for these funds to be distributed before they can apply for decentralization certification.
Registration and Financing of New Tokens
For projects that want to raise funds by selling tokens, they must meet two硬性规定 (hard requirements) to be exempt from registration: annual financing amount less than $50 million and total financing amount less than $200 million; the tokens released for financing and the funds invested by investors must be custodied by a third party. If any requirement is not met, they must register with the SEC according to U.S. investment laws.
The financing amount limit is easy to understand. The custody requirement means: the project party does not have ownership of the raised funds before the tokens can be transferred to investors. This provision will make many current ICOs that can arbitrarily change rules and allow随意超募 (random over-subscription)不复存在 (cease to exist). In the future, all token financing may need to确定规则 (determine rules) in advance, and participants hand over funds to custodian institutions, so they may face KYC and other审查 (reviews) by the custodian institution.
If the project party's financing amount exceeds the limit, or refuses to use a custodian institution, it must undergo the normal registration process according to investment laws, otherwise it is illegal. Even if the project party meets the exemption conditions, it still needs to follow the aforementioned information disclosure requirements until the project completes the decentralization certification.
DeFi Regulation and Developer Protection
Regarding DeFi, if the protocol can be controlled, modified, or censored by a single person or group, it will be deemed "non-decentralized" and must register as a securities intermediary, complying with SEC and FinCEN rules (including AML, KYC, and record keeping); if the DeFi front-end is operated by a U.S. entity, it needs to use on-chain analysis tools to screen sanctioned addresses, block transactions with sanctioned addresses, and implement risk assessment and record keeping.
If deemed decentralized, it is no different from other decentralized projects and will be largely exempt from regulatory scrutiny.
For protocol developers, if they are not project team members but merely write code, maintain systems, or provide nodes, liquidity pools, etc., they will be exempt, provided they do not have the authority to control protocol rules. However, anti-fraud and anti-manipulation provisions still apply to such developers.
Digital Asset Brokers and Banks
The bill stipulates that digital assets are incorporated into the Bank Secrecy Act. Digital asset brokers, dealers (e.g., market makers), and exchanges must establish AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) plans, register as money services businesses, comply with the制裁规定 (sanctions regulations) of the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), report suspicious transactions, implement customer identification, etc.
Regarding banks, the bill allows banks to engage in businesses including digital asset custody, trading,抵押贷款 (collateralized loans), as well as stablecoin issuance, node operation, and self-custody wallet software development. In addition, the bill makes special provisions for stablecoins: it prohibits paying interest solely for holding stablecoins but allows "activity-based rewards" based on transactions, liquidity provision, governance, etc. Banks must not promote stablecoins by claiming they are "similar to deposits, FDIC insured," etc.
Decentralization is No Exception
Coinbase founder Brian Armstrong pointed out on X the problems he sees: it essentially prohibits stock tokenization; it gives the government the authority to regulate users' DeFi transaction records; it further expands the SEC's power and stifles innovation; prohibiting stablecoin rewards gives banks the ability to打击竞争对手 (strike competitors).
From an objective perspective, this bill has offended almost all industry participants: Web3 projects need to disclose regularly and are subject to监管 (regulation) on cashing out; exchanges are almost no different from traditional brokerages; NFTs are basically banned; DeFi is heavily restricted; individual investors' cryptocurrency financial status is fully exposed.
The good thing is that this bill significantly increases the cost of wrongdoing for project parties. If they want to cash out, the token price must still be favorable when the project meets the decentralization requirements, and they cannot cash out privately through OTC or other channels. Investors can understand the true face of the project through regular information disclosure and will no longer be deceived by sweet talk on X. In addition, these new compliance requirements raise the entry barrier for small companies, allowing large companies to better maintain their垄断地位 (monopoly position).
The current content of the bill does not treat the Web3 industry as an emerging industry but毫不犹豫地 (unhesitatingly) incorporates it into the traditional financial regulatory framework. Obviously, the real big金主 (backers) behind the Banking Committee, Wall Street banks, and other financial institutions cannot accept the loss of话语权和定价权 (discourse power and pricing power). New players who want to join must abide by these game rules that may have been set a hundred years ago. Within this framework, cryptocurrency is just another security.
Another reason for the bill's deviation comes from bipartisan博弈 (game theory). The political博弈 (game) behind the CLARITY Act is actually very complex. Regarding the bill itself, Trump's Republican Party hopes to provide a宽松的监管环境 (loose regulatory environment) to make the U.S. the world's "crypto hub," but the Democratic Party believes that the条款拟定的过于宽松 (terms drafted by the Republicans are too loose). A "pro-industry, weak regulation" approach cannot fully protect investor interests and will also纵容 (tolerate) "political corruption"行为 (behavior) similar to Trump himself issuing tokens.
For the Republicans, who hold 53 seats, they need 60 votes to ensure that Filibuster is not triggered (a rule designed by the Senate to protect the discourse power of minority parties, allowing senators to speak without a time limit. As long as the majority party does not have 60 votes to pass a motion to end debate, the minority party can use Filibuster to indefinitely delay the bill vote). This means they need to win over at least 7 Democratic senators to safely pass the bill vote.
But due to the approaching midterm elections in November 2026, Trump's almost overt manipulation in the cryptocurrency field has made some Republican senators also worry that supporting a loose bill will cause dissatisfaction among some voters. This puts greater pressure on the Republicans.
From the result, either the Republicans had no intention of supporting innovation in the first place, or they were forced to make大量妥协 (大量妥协/significant compromises) under pressure from the Democrats. According to information disclosed by Galaxy's head of research, Alex Thorn, on X on January 7th, the Democrats had previously proposed修改诉求 (amendment requests) for the front-end, DeFi, financing上限 (caps), etc., and these requests were all reflected in the bill made public yesterday. It seems that the deviation of the bill's content may come more from Republican compromises.
Unlike Coinbase, a16z and Kraken believe that although the bill is still not perfect, it should not be further delayed. For VCs, stricter regulation can make Meme tokens exit directly, bringing more space for "VC coins." But for retail investors, corresponding to investor protection is the不复存在 (disappearance) of decentralization. The庄家 (house) of the casino is no longer some random guy. The tokens that can survive have their pricing power returned to capital.
The current CLARITY Act is more of a诏安书 (edict of pacification/co-option) from capital to cryptocurrency than a护身符 (talisman) for investors.
