Blockchain giant Cardano categorized based on transparency: a well-defined distinction in the digital ledger sector
In a significant move for the cryptocurrency sector, the Digital Asset Market Structure Clarity Act of 2025 (CLARITY Act) was passed by the House of Representatives on July 17, 2025. This groundbreaking legislation, part of a broader "Crypto Week" that included stablecoin and central bank digital currency (CBDC) legislation, aims to bring clarity to the longstanding ambiguity over whether digital assets like blockchain tokens should be regulated as securities by the Securities and Exchange Commission (SEC) or as commodities by the Commodity Futures Trading Commission (CFTC).
Key provisions of the CLARITY Act include clearer regulatory authority, a market structure focus, and an expedited provisional registration process for crypto firms. Regulators would have one year to adopt necessary rules, with preparatory actions required to ensure smooth implementation.
The CLARITY Act does not unilaterally classify all blockchain tokens as either securities or commodities. Instead, it establishes a framework for determining classification, likely preserving some form of the Howey Test while clarifying the jurisdictional boundaries between the SEC and CFTC. This means that tokens like Cardano (ADA) could see a shift in their regulatory status, especially if they are deemed not to meet the SEC’s definition of a security.
For Cardano, this potential shift could bring increased legal clarity, as the CLARITY Act could help its developers and stakeholders better understand compliance requirements and operational boundaries. If ADA were classified as a commodity, it would face different (and typically less stringent) disclosure and registration requirements compared to securities. However, critics argue that shifting oversight to the CFTC—which lacks a strong consumer protection mandate—could create new risks.
Regulatory certainty generally boosts investor confidence, as it reduces the risk of sudden enforcement actions or regulatory shifts. For Cardano, a clear classification could encourage more institutional and retail participation by addressing one of the sector’s most persistent risks—regulatory unpredictability. However, some consumer advocates warn that the current version of the CLARITY Act prioritizes industry certainty over robust investor protections, which could lead some investors to remain cautious.
In summary, the CLARITY Act, now passed by the House, marks a major step toward resolving the regulatory classification of blockchain tokens in the U.S., with most digital assets likely to fall under CFTC rather than SEC oversight. For Cardano, this could mean clearer legal standing and potentially greater investor confidence, though concerns remain about the adequacy of investor protections under the new framework. The final impact will depend on the details of implementing regulations and how the SEC and CFTC interpret and enforce the new rules.
It is important to note that the CLARITY Act's progress is currently hindered by political hurdles, which could influence its progress and potentially impact investor confidence in Cardano. Despite these challenges, Cardano, with its distinctive Proof of Stake (PoS) protocol Ouroboros and high level of decentralization, stands out in terms of evolvability, security, and sustainability, making it well-positioned to navigate the regulatory landscape.
The CLARITY Act highlights the potential shift of blockchain tokens like Cardano (ADA) from Securities and Exchange Commission (SEC) regulation to Commodity Futures Trading Commission (CFTC) oversight, and this technological change could bring increased legal clarity for Cardano's developers and stakeholders. The progressive legislation, part of the broader "Crypto Week," aims to establish a framework for determining the classification of blockchain tokens as either securities or commodities, potentially influencing their regulatory status and disclosure requirements.
