H.R.2365 - Securities Clarity Act of 2025 (119th Congress)
Summary
H.R.2365, the Securities Clarity Act of 2025, aims to amend securities laws by excluding 'investment contract assets' from the definition of a security. This bill specifically targets fungible digital representations of value recorded on cryptographically secured public distributed ledgers, intending to provide regulatory clarity for digital assets. The bill was introduced in the House of Representatives by Mr. Emmer and Mr. Soto and referred to the Committee on Financial Services.
Expected Effects
If enacted, this bill would remove certain digital assets from being regulated as securities under existing securities laws. This could lead to reduced regulatory burdens for businesses dealing with these assets. It may also impact investor protection, depending on how the new definition is interpreted and enforced.
Potential Benefits
- Reduced Regulatory Burden: Companies dealing with qualifying digital assets may face fewer compliance requirements.
- Increased Innovation: The clarity could encourage innovation and development in the digital asset space.
- Market Growth: Defining these assets outside traditional securities laws could foster market growth and adoption.
- Decentralized Finance (DeFi) Advancement: Supports the growth of DeFi by clarifying the regulatory landscape for certain digital assets.
- Clarity for Investors: Provides a clearer understanding of which digital assets are regulated as securities.
Most Benefited Areas:
Potential Disadvantages
- Investor Protection Concerns: Removing assets from securities regulations could reduce investor protections against fraud and market manipulation.
- Regulatory Arbitrage: Companies may structure assets to fit the 'investment contract asset' definition to avoid regulation.
- Enforcement Challenges: Defining and enforcing the new definition could prove difficult for regulatory agencies.
- Market Instability: Reduced regulation could lead to increased market volatility and risk.
- Unintended Consequences: The new definition might inadvertently exclude other assets that should be regulated as securities.
Constitutional Alignment
The bill's alignment with the US Constitution primarily concerns Congress's power to regulate commerce (Article I, Section 8, Clause 3). The definition of securities and the extent of federal regulatory authority fall under this clause. The bill does not appear to infringe on individual rights outlined in the Bill of Rights. However, the potential impact on investor protection could be debated in terms of promoting the general welfare.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).