U.S. House of Representatives Pass the CLARITY Act with Bipartisan Support
July 17, 2025
Washington, D.C. – Congressman DonDavis (NC-01), Ranking Member of the House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development, issued the following statement after the U.S. House of Representatives passed H.R. 3633, Digital Asset Market Clarity Act of 2025, also known as the CLARITY Act, by a bipartisan vote of 294-134. The bipartisan legislation takes a critical step toward establishing a regulatory framework for digital assets in the United States.
“At present, there is no established market structure to protect consumers or provide clear rules of the road for businesses and innovators. It’s the wild, wild west! Congress must deliver market structure legislation that brings clarity,” said Congressman DonDavis, Ranking Member of the Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development. “Millions of Americans are holding cryptocurrency, using it in financial transactions, or using other digital tokens as part of new, innovative technologies and services. There must be consumer protections, and the United States must lead.”
Under current law, the Commodity Futures Trading Commission (CFTC) has limited authority over digital asset spot markets. The CLARITY Act expands the agency’s role to supervise day-to-day market activity and introduces standards for safeguarding customer funds, registering platforms, and enhancing market transparency.
“If America doesn’t lead in digital asset development, we risk losing innovation to Europe or our adversary China,” said Congressman Dusty Johnson (SD-At Large), Chairman of the Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development. “Our CLARITY Act puts in place a strong, commonsense framework to give developers and consumers the certainty they need to thrive in the United States. I’m grateful for the work of my colleagues who helped get this bill across the finish line in the House and I am hopeful the Senate acts soon – there is no time to waste.”
“Before today, millions of Americans engaged with digital assets without any consumer protections,” said Ranking Member Angie Craig (MN-02), Ranking Member of the House Agriculture Committee. “We only need to look at the meltdown of FTX, which cost retail investors and pension funds across the country millions in losses, to understand the risk of continuing the status quo. The CLARITY Act takes a step in the right direction by allowing the CFTC and SEC to mitigate undue financial risk and protect everyday Americans participating in digital asset markets. This bill is not perfect. There is more work to be done to prevent those in power, including the president’s family business, from the inherent conflicts of interests of participating in the digital asset and other markets while president. I look forward to leading the charge to put strong conflicts of interest and corruption guardrails in place where they do not exist today in the executive branch.”
“I am grateful for Congressman Davis's contributions on digital asset market structure,” said Chairman Glenn Thompson (PA-15), Chairman of the House Agriculture Committee. “As subcommittee ranking member this year, he helped to lead the Committee's work on digital assets and is an important partner to our market structure legislation. Our bipartisan CLARITY Act will bring regulatory certainty and clarity in the digital asset ecosystem, allowing Americans to innovate and America to lead in this new digital economy.”
Key provisions of the CLARITY Act include:
- Clarifies Regulatory Jurisdictions. The legislation establishes standards for determining whether a digital asset falls under SEC or CFTC oversight, reducing regulatory uncertainty and ensuring consistent and effective supervision.
- Strengthens Consumer and Investor Protections. The legislation prohibits commingling of customer and firm funds, requires segregation of customer assets, and imposes capital and liquidity requirements to protect consumers and ensure financial stability.
- Promotes Market Integrity and Transparency. Digital asset trading platforms will be required to implement fair trading practices, maintain comprehensive records, and publicly report trading activity, which will help detect and prevent fraud and market manipulation.
- Provides Pathways for Digital Asset Developers. The legislation creates a pathway for digital asset developers to raise funds under SEC jurisdiction and requires disclosures that include details about a project’s operation, ownership, and structure.
- Establishes Registration and Disclosure Requirements. The legislation requires digital asset intermediaries to register with the relevant regulatory body and mandates tailored disclosures to ensure that investors fully understand the nature and risks associated with digital assets.
- Anti-Money Laundering (AML) Safeguards. Makes clear that Bank Secrecy Act requirements apply to digital asset firms registered under this legislation, ensuring these entities follow the same standards as traditional financial institutions to detect and prevent illicit finance, tax evasion, and other criminal activities.
- Implements Interim Oversight. While rulemakings are underway, the legislation requires digital commodity exchanges intermediaries to register with the CFTC and to be members of the National Futures Association (NFA), providing immediate oversight and consumer protections.
- Supports Consumer Education. The legislation funds public education initiatives to help Americans understand digital assets, the associated risks, and how to avoid scams or high-risk investments.
The bill reflects bipartisan cooperation across committees of jurisdiction, including the House Agriculture and Financial Services Committees. Congressman Davis emphasized that the longer Congress delays action, the greater the risk American consumers and innovators face, and the higher the chance that digital asset companies will relocate abroad.
During testimony before the House Rules Committee on Monday, July 15, 2025, Congressman Davis also called for stronger guardrails on Executive Branch conflicts of interest, noting that any administration, regardless of political party, must be held to ethical standards when it comes to digital asset involvement.
Congressman DonDavis serves as the Ranking Member of the House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development in the 119th Congress.
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