Cryptocurrency Regulation is Changing. Here’s What That Means for Slash.
On August 1, 2025, the CFTC’s Acting Chairman, Caroline Pham, announced that U.S. financial policymakers were firing the starting pistol for a crypto sprint. "Providing regulatory clarity now and fostering innovation in digital asset markets will deliver on the Administration's promise to usher in a Golden Age of Crypto," Pham said in a statement.
The CLARITY Act, formally the Digital Asset Market Clarity Act of 2025, is the most significant piece of cryptocurrency legislation working its way through Congress. It passed the House in July 2025 with a 294–134 vote, and in May 2026, it cleared the Senate Banking Committee. Treasury Secretary Scott Bessent initially targeted spring 2026 for passage into law; as summer begins, analysts now predict that the bill will hit the president’s desk in early August.
The CLARITY Act would lay out which government agencies oversee specific aspects of the cryptocurrency market, define key elements of cryptocurrency usage and how those definitions will be interpreted legally, and delineate how and where the U.S. government can involve itself in cryptocurrency-related exchange. The bill, if passed into law, will shape how cryptocurrency businesses can operate in the U.S. for years to come.
While much of the proposed regulation focuses on companies that hold and trade crypto assets, the CLARITY Act would also affect companies that act as intermediaries for crypto transactions — a category that includes Slash. We want to explain how the new framework would impact our operations and provide additional industry context about how crypto operators will be navigating the shifting regulatory landscape in the coming months.
The Precedent of U.S. Cryptocurrency Regulation
For the past decade, regulatory efforts regarding cryptocurrency have been more reactionary than proactive.
Much of the government’s approach has relied on enforcement through litigation, creating an industry that could be difficult to build in with confidence. Nish Chari, General Counsel at Alchemy, a blockchain developer platform, wrote to Slash that “the presumption that existing laws could cover new and novel technology led to a regulatory gray area that resulted in both government overreach against legitimate businesses as well as innovation moving offshore.”
The grey area Mr. Chari refers to centers on one unresolved problem: regulators have been split on how to legally define cryptocurrency.
In 1946, the Supreme Court's ruling in SEC v. W.J. Howey Co. established what qualifies as an "investment contract" under federal securities law. The "Howey test" holds that a transaction is a security if it involves (1) an investment of money (2) in a common enterprise (3) with an expectation of profits (4) based on the efforts of others. For 80 years, the four-part test has been the standard tool for determining whether something falls under SEC oversight. Then came crypto.
Cryptocurrency is a loaded term. While much of the spotlight has been on Bitcoin, the blockchain has enabled an entirely new class of assets to evolve. Because the category is so broad and fast-moving, U.S. policymakers have struggled to pin down blanket rules. Regulation for an asset like Bitcoin, which most people buy as an investment, doesn't necessarily fit a value-pegged stablecoin like USDC, a tokenized representation of a real-world asset. Each has different economic functions and arguably different regulatory needs.
These debates have played out in court for the past decade. The CFTC has classified Bitcoin as a commodity since 2015, while the SEC has often taken the position that most other tokens are securities since 2017. Securities and commodities are governed under entirely different regulatory systems. If an asset is treated as a security, the companies issuing, selling, or facilitating trades around it can face disclosure, registration, and investor-protection requirements. Commodities are generally subject to a lighter framework centered on market integrity and trading oversight.
The two commissions have asserted overlapping authority for years without a clear statutory line between them, leaving the crypto industry with two regulators but no definitive standard for which rules applied when. Companies caught in the middle often did not know which compliance framework regulators would expect them to follow, and in several high-profile cases, those questions ended up being resolved through litigation.
In 2017, the Securities and Exchange Commission (SEC) signaled that tokens sold through Initial Coin Offerings (crypto's rough equivalent of an IPO) generally qualify as securities. A wave of enforcement actions followed, targeting major exchanges including Coinbase, Binance, Kraken, and others. After a change in SEC leadership and an executive order in January 2025, most of those cases were dropped, leaving the crypto exchange industry in legal limbo.
In 2020, the SEC sued Ripple Labs, the issuer for the cryptocurrency XRP, arguing that every sale of XRP was an unregistered securities offering. A federal judge issued a split ruling on the case, adding even more complexity to the legal status of crypto. When Ripple sold XRP directly to institutional buyers, the court found those were securities sales since the buyers had signed contracts with Ripple and were investing based on the company's stated plans. But when XRP was sold anonymously on public crypto exchanges to everyday buyers (what the court called "programmatic sales"), those were not securities sales.
Slash reached out to both the SEC and CFTC for additional context on cryptocurrency legal precedent and the future of regulation in the space, but did not receive a response prior to publication.
Right before the CFTC officially began its crypto sprint to resolve the regulatory confusion and promote crypto development in the U.S., the first major federal crypto legislation, the GENIUS Act, was signed into law. The GENIUS Act tackled the most straightforward category of crypto to regulate first: payment stablecoins.
The law established the first federal framework for stablecoin issuers like Circle (USDC), who issues tokens pegged to the U.S. dollar, requiring that each stablecoin be backed one-for-one by U.S. dollars or other low-risk reserve assets. Issuers also must publish monthly reserve reports examined by registered accounting firms and meet capital, liquidity, AML, and sanctions compliance standards. It also clarified that compliant payment stablecoins are neither securities nor commodities under federal law, handing primary oversight to bank regulators instead of either the SEC or the CFTC.
How the CLARITY Act Changes Cryptocurrency Regulation
The CLARITY Act builds on the foundation laid by the GENIUS Act, extending the logic of clear definitions and assigned regulators from stablecoins to the rest of the digital asset market. Although the CLARITY Act is a sweeping piece of legislation, its provisions can be grouped into four main goals. In simple terms, the act:
- Defines who regulates what
- Sets the rules for crypto businesses
- Opens legal pathways for new assets and activities
- Sets limits on government-issued digital currency
Together, the provisions represent the most comprehensive attempt yet to bring digital assets into the U.S. regulatory system. Here's what that means in the current iteration of the bill:
Defining who regulates what
The principal goal of the CLARITY Act, hence its name, is to give both regulators and crypto operators more clarity over what rules apply and where they apply. The act defines several crypto-related terms under a legal framework (including "digital asset," "digital commodity," "blockchain," and "decentralized governance system") and uses those definitions to determine which regulatory body has authority over certain kinds of activity.
Assets that are sufficiently decentralized and function more like commodities, like Bitcoin, would generally fall under CFTC oversight. Assets that resemble investment contracts tied to a central organization would fall to the SEC. The bill also creates a process for certain projects to transition between those categories as networks mature and decentralize.
The practical upshot: a company building blockchain infrastructure or trading crypto in the U.S. can now look at what it's doing and know, with reasonable certainty, who its regulator is.
“Just as the GENIUS Act unlocked stablecoin adoption, CLARITY removes the legal ambiguity that has kept institutional-grade tokenized assets and on-chain financial products on the sidelines,” Mr. Chari wrote. “Banks, asset managers, and fintechs have been ready to build for years, and they needed a legal framework to do it.”
Setting the rules for crypto businesses
Crypto exchanges in the U.S. have operated in a complicated legal environment for years. There has never been a federal license specifically designed for crypto exchanges, so most companies relied on a mix of state money transmitter licenses and other financial registrations not originally intended for digital assets. After FTX collapsed and customer funds went missing, lawmakers increasingly argued that the industry lacked a comprehensive supervisory structure.
The CLARITY Act would create a licensing system for crypto businesses, including exchanges, brokers, dealers, and custodians. It also would establish baseline rules for how those companies handle customer assets, disclose risks and custody arrangements, and operate under standards more similar to traditional financial intermediaries.
For users, this means the platform holding your crypto will be supervised by a federal regulator with more explicit authority and rules.
For Slash, the custody-specific rules would not apply to our platform directly. Slash enables you to on- and off-ramp USD into stablecoins, but Slash does not custody digital assets.⁴ However, like other intermediaries that facilitate conversion between fiat and crypto, Slash will likely have new federal obligations as the rulemaking process unfolds.
Opening legal pathways for new assets and activities
Because the legal environment in the U.S. was unpredictable, many crypto operators opted to relocate their businesses elsewhere. Countries that established clearer regulatory frameworks earlier – such as El Salvador, the UAE, or Singapore – attracted an influx of crypto companies. Meanwhile, U.S. developers building on the blockchain worried that merely writing open-source code could make them a regulated money transmitter, exposing them to complex and expensive compliance obstacles.
The CLARITY Act would lower some of the barriers that have pushed crypto companies offshore. It creates a legal path for new tokens to be sold to U.S. investors with structured disclosures, similar to how startups raise money from accredited investors under existing securities exemptions. Companies issuing tokens won't have to take on the full compliance burden of a traditional public stock offering, but they will have to share standardized information about what they're selling and how it works.
The bill also clarifies that banks can custody and transact in crypto under normal banking supervision. Banks have largely stayed on the sidelines of crypto, in part because federal guidance discouraged it. Under CLARITY, a traditional bank could hold digital assets on behalf of its customers the same way it holds cash or securities today, opening the door for institutional players to participate in the crypto economy.
Finally, the act would protect developers of decentralized financial software (DeFi) from being treated as financial intermediaries. The principle is that someone who writes and publishes open-source code but doesn't control user funds or run a business on top of the code shouldn't face the same regulatory obligations as a company that holds customer money. The distinction is meant to better protect developers, thereby keeping technical development of new protocols legal and onshore in the U.S.
Setting limits on government-issued digital currency
While the bulk of the bill deals with how the private sector is regulated, the final section sets rules around what the U.S. government is and is not allowed to do with crypto.
Specifically, it bars the Federal Reserve from issuing what's called a central bank digital currency (CBDC) — a digital dollar alternative issued directly by the government to ordinary people. Several countries, including Nigeria and the Bahamas, have already launched versions of this. Others, like the EU and China, are actively developing one. The U.S. is now the only G20 country to have moved toward legislatively prohibiting a CBDC, while 18 of the other G20 members are in advanced stages of exploration.
A central bank digital currency issued directly to individuals would, in theory, give the government a direct view of how money moves through the economy, which raises concerns about financial surveillance and the potential to restrict spending in ways that physical cash and digital dollars don't allow.
By taking that option off the table, the CLARITY Act reinforces the model the GENIUS Act established for stablecoins: crypto in the U.S. will continue to be issued by regulated private companies under federal oversight, rather than directly by the Federal Reserve itself.
What the CLARITY Act Means for Slash and Other Crypto Operators
The full scope of how the CLARITY Act would affect the U.S. cryptocurrency industry will not be fully understood until regulators begin translating the legislation into specific rules. Importantly, the bill is not yet law, and the final version that reaches the president’s desk could look different from the version currently moving through Congress.
“No bill is perfect,” Mr. Chari wrote. “Our democratic process means finding consensus across genuinely competing interests, and the folks involved have made real progress to get here. Tradeoffs were made, but the goal is a bill that does more good than harm for an industry that has been asking for regulation for years. Let’s not let perfect be the enemy of good.”
After years of regulatory ambiguity, lawmakers and industry participants alike are pushing toward a more defined framework for how digital asset businesses operate in the United States. As those rules evolve, Slash will continue adapting our product and compliance measures to align with the standards established by U.S. regulators while maintaining the stablecoin capabilities our users rely on.
Slash operates in a part of the crypto industry that was more directly addressed by the GENIUS Act, though the CLARITY Act is expected to further define how platforms like ours fit into the broader regulatory framework if it becomes law. We don't run an exchange. We don't custody digital assets on your behalf. What Slash (and our regulated infrastructure partners) do is connect the banking system to the blockchain, letting you convert fiat held in your business bank account into stablecoins like USDC and USDT, and back again, without needing a separate crypto wallet or custodial account.¹
The portions of the bill governing how exchanges and custodians hold customer assets would not apply to Slash in the same way they apply to trading platforms. However, the legislation would still shape the environment we operate in by clarifying how banks and infrastructure providers, including partners like Column N.A. and Bridge, can participate in crypto-related activity. It also would establish a clearer federal framework for the fiat-to-stablecoin infrastructure that powers products like ours, alongside the GENIUS Act’s rules for stablecoin issuers themselves.
There are many details that won't be settled the moment the bill is signed. Major financial legislation in the U.S. typically sets a general framework, and then federal agencies — in this case, primarily the CFTC, the SEC, and bank regulators — spend the following months and years writing the specific rules to implement it. That's how the Dodd-Frank Act worked after 2010, and it's how the GENIUS Act has been working since it passed in July 2025. The CLARITY Act will be similar: the broad structure becomes law, and the operational details get worked out in a rulemaking process that the industry, regulators, and businesses like Slash participate in along the way.
For our users, the takeaway is that in the near term, the way you use Slash is expected to keep working as it does today. Over time, as the rules get written, we will likely see clearer disclosures across the industry, stronger integration with our banking and financial infrastructure partners, and a more stable regulatory environment underneath our product. We'll continue to share updates as the implementation rolls out and the rulemaking takes shape.
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This article is for informational purposes only. The CLARITY Act has not yet been signed into law, and specific regulatory requirements will be determined through agency rulemaking following passage.
