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The United States is reshaping how regulators approach crypto. Since July, The CLARITY Act passed the U.S. House of Representatives, the SEC launched Project Crypto, and the Senate Banking Committee released a draft of its Digital Asset Market Structure Legislation with a request for information from industry builders.
Staying up to date on regulatory developments prepares teams to remain competitive if regulation is signed into law. Tally tracks the latest updates and is building best-in-class compliance infrastructure for protocols to capitalize on the regulated crypto era.
Let’s take a look at everything that’s happened so far.
The CLARITY Act officially passed the U.S. House of Representatives, marking a turning point for token projects, policy advocates, and decentralized governance ecosystems.
"The CLARITY Act will catalyze a New Golden Age of Tokens; where transparency, decentralization, and regulatory alignment are foundational." (The CLARITY Act of 2025: A New Golden Age of Tokens)
The Act establishes a two-phase regulatory pathway: tokens begin as investment contracts under SEC oversight where "issuers can raise up to $75 million within a 12-month window," then transition to "digital commodities" regulated by the CFTC once protocols meet decentralization criteria, including "no single entity or affiliated group controls more than 20% of the token supply or governance power."
The CLARITY Act’s framework would create a structured path for protocol teams to access U.S. institutional capital while building toward decentralization, replacing regulatory uncertainty with clear compliance standards. The Act also "clarifies secondary market trading of tokens previously issued in a securities offering will not be treated as securities transactions" once they achieve commodity status, removing barriers to U.S. exchange listings and institutional adoption that previously may have forced projects offshore.
Next steps: The CLARITY Act moves to the Senate, where Senate Banking Committee Chairman Tim Scott has developed a competing bill (the Responsible Financial Innovation Act of 2025) that builds on the CLARITY Act but introduces key changes. Senator Cynthia Lummis indicated that while the Senate wants to "honor as much of the House's work as we can," the final legislation will likely be "CLARITY as tweaked by the Senate.” Senator Scott faces a September 30 deadline to advance his bill out of committee, with potential floor action and reconciliation with the House version expected in late 2025 or early 2026.
For more on The CLARITY Act:
On July 31st, 2025, SEC Chairman Paul Atkins announced Project Crypto, an initiative to "modernize the securities rules and regulations to enable America's financial markets to move on-chain."
The initiative focuses on three critical areas for protocol teams:
Establishing "clear guidelines that market participants can use to determine whether a crypto asset is a security" to end confusion around token classification.
Creating "a path for software developers to unleash on-chain software systems that do not require operation by any central intermediary" with protected status for decentralized protocols.
Implementing "an innovation exemption that would allow registrants and non-registrants to quickly go to market with new business models."
For protocol teams, Project Crypto represents a shift from enforcement-based regulation to frameworks designed to enable compliant innovation. Chairman Atkins declared "the days of convoluted offshore corporate structures, decentralization theater, and confusion over security status, are over."
Additionally, Tally’s CRO, Tyler, participated in a roundtable discussion with SEC Commissioner Hester Pierce at the Science of Blockchain Conference. They focused on creating regulatory clarity that keeps blockchain developers building in the U.S. Tyler emphasized Tally’s view that clear, actionable definitions of decentralization are essential for projects to navigate compliance.
For more on Project Crypto:
The Senate Banking Committee released a discussion draft of its Digital Asset Market Structure Legislation with a Request for Information seeking industry input on jurisdictional clarity, decentralization standards, and Safe Harbor provisions.
Tally submitted a response advocating for "spelling out the jurisdiction questions in legislation instead of deferring to the SEC" to provide certainty for "distributed-ledger-based assets like network and protocol tokens" and proposing "quarterly progress reporting on: decentralization metrics, technical maturity milestones, governance evolution, and network independence" to create measurable pathways for protocols transitioning from securities to commodity status.
The response emphasized supporting "the CLARITY Act defining a mature blockchain system as one where no person or group of persons under common control has the unilateral authority, directly or indirectly, to control or materially alter the functionality or operation of the blockchain system."
The RFI was a direct opportunity for protocol teams to influence regulatory frameworks, signalling a shift toward collaborative policymaking that incorporates technical expertise from the teams developing these systems.
The CLARITY Act, Project Crypto, and Senate Banking Committee aim to bring clarity to token launches, institutional participation, and compliance requirements for crypto protocols.Teams that prepare for these frameworks may be better positioned to capitalize on regulatory clarity, potentially accessing U.S. institutional capital while reducing compliance risks as new rules develop
Tally is building best-in-class infrastructure for the world's most valuable networks to meet compliance standards with confidence. To learn more or get started reach out at tally.xyz/contact.
1 comment
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