Why Is Crypto Crashing? Everything to Know About New Congress Market Bill

[Redator]

Why is crypto crashing? One reason is that the regulatory turf war over crypto might finally be nearing a conclusion, and it’s not all good news.

A new bill—called the CLARITY Act—has landed in Congress, proposing to wrest oversight of digital assets away from the SEC and hand it to the CFTC.

If passed, the legislation could redraw the map for how crypto is governed in the U.S. and finally give developers, exchanges, and investors the rules they’ve been asking for. But many aren’t putting faith in a Congress whose approval rating is at a record low.

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Why is Crypto Crashing? A Bold Move to Redefine Crypto Oversight

Congress? The same Congress that had done absolutely nothing for decades. Whose approval rating is at record low. That Congress? Well, um, yes!

The CLARITY Act cuts through years of bureaucratic fog with one blunt proposal: treat most digital assets as commodities, not securities. That means shrinking the SEC’s reach and putting the Commodity Futures Trading Commission in the driver’s seat.

Rep. Bryan Steil, who chairs the House Financial Services Subcommittee, says it’s a move aimed at keeping the U.S. ahead in the global crypto race.

“Our bill secures American dominance, democratizes digital assets, unleashes innovation, and protects consumers from fraud,” Steil stated.

ICYMI: The CLARITY Act has been introduced to finally establish clear rules for crypto@RepFrenchHill of Arkansas is leading the charge on what could be the most important crypto legislation we've ever seen in this country. He's joined by a bipartisan group of co-sponsors… pic.twitter.com/07yXUAZW1J

— Max Avery (@realMaxAvery) May 29, 2025

That redefinition would give clear cover to major digital assets like BTC, ETH, SOL, and DOGE, which have long operated in legal gray zones.

The bill’s political support cuts across party lines, with Democrats Angie Craig, Ritchie Torres, and Don Davis signing on. In a divided Congress, that kind of coalition doesn’t form unless the stakes are real.

“This is about keeping the U.S. in the game,” said Rep. Dusty Johnson. “Without clarity, we fall behind.”

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Provisions That Change the Game

The bill defines most crypto assets as “digital commodities,” including governance tokens like WLFI, issued by World Liberty Financial. It also sketches out a new category—“mature blockchain systems”—for networks that are open-source, decentralized, and cap individual ownership.

Exchanges will have a choice to register with the CFTC if they trade digital commodities, or stay under SEC scrutiny if dealing in securities. The CFTC would also get sole jurisdiction over spot markets under the bill.

Why is Crypto Crashing? What This Means for the Crypto Industry

By shifting authority from the SEC to the more hands-off CFTC, the CLARITY Act could lower the barrier for entry in crypto—less red tape, more room to build.

Projects like Ethereum and Solana may gain traction as developers and investors finally get regulatory breathing room. DeFi platforms and wallets would also be exempt from SEC interference, a clear win for the open-source crowd.

But don’t bet on a smooth ride. This is Congress we’re talking about and Trump’s pushing for an ambitious August deadline for crypto regulation.

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Key Takeaways

• Why is crypto crashing? One reason is that the regulatory turf war over crypto might finally be nearing a conclusion, and it’s not all good news.
• By shifting authority from the SEC to the more hands-off CFTC, the CLARITY Act could lower the barrier for entry in crypto.

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