Bessent pushes CLARITY Act to define token classification. The bill determines SEC vs CFTC roles reshaping exchange listings and offshore flows. Next catalyst a committee vote.
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Treasury Secretary Scott Bessent urged Congress on Thursday to pass the CLARITY Act, a bill designed to give the crypto industry a federal regulatory framework and resolve the long-running ambiguity over how digital assets are classified. In remarks at the White House, Bessent said the goal should be to bring digital asset activity into the United States rather than let it remain largely offshore.
The direct consequence is a potential overhaul of token classification risk. If the CLARITY Act becomes law, exchanges, custodians and DeFi protocols would no longer operate under the threat of a surprise SEC enforcement action that reclassifies a token as a security after years of trading.
The simple reading of Bessent’s statement is that Congress should give the industry the regulatory clarity it has long demanded. The better market reading is more specific. The CLARITY Act would define exactly which federal agency – the SEC or the CFTC – has jurisdiction over each digital asset. That single line determines whether a token is subject to full securities registration, disclosure requirements and trading restrictions, or whether it can be traded more freely as a commodity.
Tokens that currently sit in the gray zone – assets with a development team and a validator set that have never been formally classified – face the most binary outcome. If the bill grants the CFTC broad authority over most tokens, the cost of listing and trading them falls significantly. If the SEC retains jurisdiction over tokens that resemble investments in a common enterprise, a wide range of altcoins and DeFi governance tokens would become securities overnight, forcing exchanges to delist them or register with the SEC.
Bessent’s remark that the US should be the home for digital assets, not a place that drives activity abroad, carries a concrete implication. The administration is signaling that it will actively discourage offshore migration of crypto operations through regulation, enforcement or tax policy. That raises the risk profile for exchanges and custodians that operate primarily outside the US but serve American retail and institutional clients.
For Coinbase, Kraken and other US-based platforms, clear classification rules would reduce the uncertainty that has limited their token listings and staking services. For offshore exchanges that rely on US order flow, the same clarity could become a compliance headache if the CLARITY Act imposes extraterritorial obligations or tightens know-your-customer requirements for crypto transactions that touch the US financial system.
The second-order effect touches liquidity. If the US becomes a clearer regulatory environment, capital that fled to Singapore, the UAE or the Bahamas could begin to flow back. That would deepen order books on US exchanges and compress spreads that offshore venues currently offer.
The CLARITY Act must pass both chambers of Congress and be signed into law. Bessent’s push adds executive-branch weight to what has been a slow-moving legislative effort. The next concrete catalyst will be a committee markup or a floor vote. If the bill stalls, the regulatory risk reverts to the status quo: SEC enforcement actions, no-decision letters and the threat of a surprise classification event.
A parallel risk exists even if the bill moves forward. Compromise language could water down the classification framework, leaving certain token categories – such as stablecoins or staking derivatives – in limbo. That would create a two-tier regulatory environment where well-known tokens like Bitcoin and Ethereum get clarity while smaller-cap assets remain vulnerable.
For traders and allocators building a watchlist, the useful frame is not “crypto gets regulated” but “this specific bill will decide which tokens can be traded on US exchanges under what costs.” The confirmation that strengthens the bullish case is a committee vote with bipartisan support. The scenario that worsens the risk is a partisan deadlock or a competing bill from the House Financial Services Committee that creates a separate classification regime.
The next decision point is Bessent’s follow-up testimony or a public statement from the SEC chair on whether the agency supports the CLARITY Act or sees it as preempting their authority. Until then, the uncertainty premium on borderline tokens remains embedded in their spreads and volatility.
For a broader look at how regulatory events affect crypto markets, see our crypto market analysis and profiles for Bitcoin (BTC) and Ethereum (ETH).
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.