The CLARITY Act passing the U.S. House of Representatives is an important step forward for crypto-native builders. The Act offers a clear, structured legal framework for launching and decentralizing token networks. Here's what the CLARITY Act means for YOU 🧵

The CLARITY Act introduces a phased regulatory model: → Initial Phase: Fundraising under SEC oversight → Decentralized Phase: Commodity classification under CFTC oversight This replaces the uncertainty of the Howey Test with defined, actionable compliance paths.

Fundraising Phase Under the CLARITY Act projects can raise up to $75M over 12 months, with safeguards in place: •No individual may purchase >10% of the total supply •Issuers must be U.S.-based and in good legal standing •Disclosures required: codebase, roadmap, financials, risks This safe harbor period enables responsible capital formation.

Transition to Decentralization Once a protocol satisfies the following criteria it may file a Certification of Decentralization:  • No single entity or affiliated group controls more than 20% of token supply or governance power  • The network operates on public, open-source infrastructure  • No centralized party can unilaterally alter the ledger  • There is demonstrable, independent user activity Upon acceptance, the token is presumed not to be a security and is treated as a digital commodity under CFTC oversight, unless regulators present compelling evidence to challenge that status. This certification shifts regulatory oversight from the SEC to the CFTC — recognizing the token as a digital commodity. It also opens the door for secondary market listings under CFTC-regulated exchanges.

Governance is central Projects must demonstrate decentralization— not just in architecture, but in decision-making. On-chain voting, active delegates, and transparent proposal processes are not optional, they’re essential to meeting regulatory standards.

Issuers must provide regular updates: •Semiannual reports •Event-driven disclosures (e.g. protocol upgrades, changes in control, major token transfers) •Transparent insider lockups and transfer restrictions

The CLARITY Act also clearly divides jurisdiction: •SEC: fundraising, fraud enforcement, and hybrid platforms •CFTC: oversight of decentralized, commodity-classified tokens •Joint rulemaking: handles dual-use and edge cases This delineation reduces risk and regulatory overreach.