Digital Assets on the Docket: Senate Unveils Major Crypto Regulatory Overhaul
- Keyword Financial
- Jul 23
- 3 min read
Introduction
The U.S. Senate Banking Committee has released a new discussion draft called the “Responsible Financial Innovation Act,” aiming to overhaul the regulatory framework for digital assets in the United States. This draft, which follows the recent CLARITY Act, seeks to provide clearer definitions and regulatory boundaries for digital assets, with a strong focus on investor protection and regulatory clarity. The committee is actively inviting public feedback from stakeholders in both the crypto and financial sectors to help shape the final legislation.
A key feature of the proposal is the redefinition of “ancillary assets,” which are digital assets tied to investment contracts but lacking traditional features like equity rights or dividends. This new classification helps determine whether an asset falls under the jurisdiction of the SEC or the CFTC, with the Senate draft favoring a rights-based approach over the House’s previous “maturity” test. Under this system, the CFTC would regulate ancillary assets, while the SEC would oversee non-ancillary ones, and projects could self-certify their assets, subject to SEC review. Senators Tim Scott and Cynthia Lummis emphasized that the draft aims to modernize outdated securities laws, reduce regulatory uncertainty, and keep digital finance innovation anchored in the U.S.
Currently, the Senate Banking Committee is collecting feedback on the draft, with the possibility of introducing a finalized version as formal legislation after further hearings and debate. The earlier CLARITY Act passed the House with bipartisan support but faced criticism from groups like Americans for Financial Reform, who argued it could weaken consumer protections. The ongoing legislative process reflects a broader effort to balance innovation, investor protection, and regulatory modernization in the rapidly evolving crypto market.
