Understanding Web3 Legal - H.R. 3633 – Digital Asset Market Clarity Act of 2025 - Issue 17
On May 29, 2025, the U.S. Congress introduced H.R. 3633 – Digital Asset Market Clarity Act, a landmark proposal to resolve the SEC–CFTC jurisdictional overlap and define a regulatory future for crypto. This issue breaks down what it means for lawyers, founders, and compliance professionals.
1. Dual Registration: Finally, a Starting Point
The Act creates a provisional registration regime for digital asset brokers, dealers, exchanges, and custodians — under both the SEC and CFTC. While it doesn’t settle which agency ultimately rules crypto, it provides an operational middle ground.
Why it matters: Projects and platforms can start working toward compliance without waiting for final rules. However, dual registration may be burdensome for early-stage startups.
2. End-User Distributions ≠ Securities
If a token is distributed primarily for utility — and not for fundraising — it can be exempt from being classified as a security.
Why it matters: Think of Filecoin, Arweave, or Lido. Tokens earned or used in decentralized protocols may avoid securities treatment if distribution is genuinely for on-chain usage.
⚠️ But there are no bright-line rules — SEC discretion remains.
3. Stablecoin Guardrails
Introduces a framework for "permitted payment stablecoins":
Fiat-backed
Issued under state or federal oversight
Must guarantee 1:1 redemption
Why it matters: This favors compliant, heavily regulated issuers and likely sidelines algorithmic stablecoins.
4. DeFi and Decentralization: Narrow Carveouts
Some DeFi systems and "mature blockchain systems" get partial exemptions — acknowledging that not every protocol fits legacy financial categories.
Why it matters: The Act recognizes decentralization — but sets no clear threshold. DAO governance, treasury control, and protocol upgradability will be scrutinized.
5. Long-Term Vision: Innovation as Policy
Establishes a permanent SEC FinHub and codifies LabCFTC
Mandates studies on NFTs, DeFi, and adversarial crypto risks
Why it matters: Crypto is no longer treated as a regulatory anomaly. It’s now a subject of strategic national innovation policy.
My Take as a Crypto Lawyer
This bill signals a shift in tone from enforcement to facilitation. Even under strict supervision, the recognition of stablecoins and softening around P2P usage could unleash momentum in DeFi. Yet, the persistent frictions in fiat-crypto rails and ambiguous decentralization thresholds leave many questions open.
Final Takeaway
This bill doesn’t offer certainty, but it offers structure — a path forward for builders, regulators, and lawyers alike.
Founders can begin compliance planning. Lawyers gain definitional clarity (and new interpretive challenges). Regulators commit to coordination.
If enacted, H.R. 3633 could become the defining U.S. crypto legislation of the decade.
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