Crypto Practice Blog

CLARITY’s Title VI shields developers and users by codifying code-as-speech, exempting non-controlling actors from money-transmitter laws, protecting self-custody, and limiting liability for publishing and operating decentralized software infrastructure.

CLARITY’s overlooked §105(b)(2) creates a two-track crypto regime by grandfathering certain exchange-traded-product tokens into automatic non-security status, giving early-listed digital assets a major regulatory and market advantage.

CLARITY’s capstone post makes the core point that the bill is a foundation, not a finished framework: it meaningfully restructures U.S. digital-asset regulation, but leaves major questions on tax, ERISA, state law, cross-border treatment, CFTC jurisdiction, and agency rulemaking capacity unresolved.

CLARITY’s §305 would let stablecoin issuers and digital-asset service providers place temporary holds on suspicious transactions, creating a pre-seizure freeze framework for crypto that parallels bank fraud and AML hold authorities.

CLARITY’s §307 would block Treasury from reviving the 2020 self-hosted wallet reporting proposal by barring routine collection of non-customer counterparty PII, while still preserving sanctions enforcement, customer-side compliance, and broader BSA authority.

CLARITY’s §505 would codify a simple rule: tokenizing a security does not change its legal character, preserving full securities-law treatment while letting the SEC adapt only the mechanics of compliance for digital assets.

The Illinois Blockchain Association has submitted a formal comment letter to the IL Department of Financial and Professional Regulation (IDFPR) on the proposed rules implementing the Digital Assets and Consumer Protection Act (DACPA), published as new Part 1031 of Title 38 of the Illinois Administrative Code.

CLARITY’s §602 creates a clear NFT safe harbor, protecting most collectible uses while excluding mass-minted investment-like offerings and fractional interests, and giving platforms strong reliance protection against shifting SEC enforcement.

CLARITY’s §404 bans deposit‑like stablecoin interest but permits broad activity‑based rewards, forcing a regulatory line between passive yield and incentivized usage, with rulemaking set to determine how strict that boundary becomes.

CLARITY’s §701 overhauls digital‑asset bankruptcy by treating customer crypto as protected “customer property,” extending broker‑dealer protections, overriding contract drafting tricks, and enabling pro‑rata, asset‑based recovery instead of unsecured creditor losses.

CLARITY’s §401 hardcodes broad digital-asset powers for banks, replacing shifting guidance with statutory authority, enabling custody, trading, lending, and infrastructure roles while retaining supervisory oversight and limiting stablecoin yield.

CLARITY’s §4B defines staking and airdrops as “gratuitous distributions,” giving them presumptive non-security status while preserving anti-fraud rules and enabling clear, rules-based token reward structures across DeFi ecosystems.

CLARITY’s §301 draws a clear DeFi boundary, distinguishing autonomous, non-custodial protocols from controlled intermediaries, using function-based tests and safe harbors to replace uncertain exchange-registration theories and enforcement-driven lines.

CLARITY’s DGS construct eliminates partnership liability risk for DAO participants, grants separate legal personhood to governance systems, and anchors token classification, decentralization, and liability outcomes across the statute.

CLARITY replaces subjective “decentralization” with a statutory coordinated-control test, anchored by a 49% threshold, enabling formal certification and predictable resale rules while sidelining Hinman’s flexible but uncertain framework.

CLARITY defines network tokens by excluding specific financial rights, enabling robust token economics via decentralized governance systems while preventing equity- or debt-like structures from bypassing securities law through tokenization.

CLARITY preserves Howey in name but rewires its effects, shifting token regulation from registration to tailored disclosure, shielding assets and secondary trading while tightly gating financial rights and decentralization standards.

CLARITY reshapes crypto regulation by classifying tokens, separating assets from transactions, enabling streamlined disclosures, legitimizing decentralized governance, easing secondary trading, and routing legal consequences without abandoning Howey’s anti-fraud core framework.

The SEC’s latest staff statement offers a roadmap for when non-custodial crypto interfaces can avoid broker-dealer registration, drawing clearer boundaries for software providers while underscoring the limits of staff-level regulatory guidance.

The SEC’s latest staff statement outlines when non-custodial crypto interfaces may operate without broker-dealer registration. While offering meaningful regulatory clarity, the framework imposes strict neutrality requirements and leaves important questions unresolved as the broader crypto regulatory landscape continues to evolve.