The Clarity Act, the crypto market-structure bill that had been advancing through the House of Representatives, has collapsed, according to Molly White's newsletter Citation Needed in its Issue 110, titled "The Clarity Act collapses."

White, a crypto critic and the author of the Web3 Is Going Just Great project, has tracked the bill's progress through her newsletter, which aggregates and annotates crypto industry news with primary citations. Issue 110 focuses on the breakdown of the legislative effort to establish a joint regulatory framework between the Securities and Exchange Commission and the Commodity Futures Trading Commission for digital assets.

The Clarity Act, formally the Digital Asset Market Clarity Act, was designed to resolve the long-standing jurisdictional dispute between the two agencies. Under the bill's framework, the CFTC would have received primary oversight of digital commodity spot markets, while the SEC would have retained authority over securities offerings and certain other token classifications. The legislation drew sustained opposition from consumer-advocacy groups and some Democratic lawmakers, who argued the bill's definitions would exempt broad categories of tokens from securities registration.

White's reporting in the newsletter characterizes the bill's failure as the product of both procedural breakdown and substantive disagreement over how to divide regulatory authority. Her analysis, which cites floor proceedings and committee records, presents the collapse as a significant setback for industry groups that had treated market-structure legislation as their top legislative priority.

The operational consequences are substantial. Without a statutory division of authority, digital-asset issuers and trading platforms continue to operate under overlapping and contested jurisdictions. The SEC's enforcement posture and the CFTC's parallel claims over commodity spot fraud remain governed by existing statutes rather than the new disclosure and registration regime the bill would have created. Exchanges that had anticipated a clear path to registration with the CFTC now face continued regulatory ambiguity.

The collapse also removes, for now, the portion of the bill addressing the legal status of secondary-market token sales, a question federal courts have been addressing case by case in litigation between the SEC and various issuers. Market participants had hoped the legislation would settle whether secondary sales of tokens initially sold in securities offerings fall within securities law, a question that now returns to the courts.

White has been a consistent critic of the bill, arguing in prior issues of Citation Needed that its token-definition provisions were drafted broadly enough to exclude most crypto assets from securities oversight. Her Issue 110 coverage frames the legislative failure within that critique, documenting the statements and procedural moves that preceded the bill's downfall.

Readers should consult the full Issue 110 of Citation Needed for White's sourcing, which includes citations to congressional records and contemporaneous reporting.

Attention now shifts to whether sponsors reintroduce market-structure legislation in the current Congress or leave the division of SEC and CFTC authority to the agencies themselves through rulemaking and enforcement discretion — a slower and more litigated path than the statutory settlement the Clarity Act attempted to provide.