A revised draft of the Responsible Financial Innovation Act of 2025 has been unveiled by U.S. Senators, focusing on the distinct regulatory roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). This updated version aims to foster clarity in the burgeoning field of cryptocurrency regulation.
Key elements of the bill include the establishment of a joint advisory committee that combines resources from both agencies, which would be tasked with providing recommendations on digital assets. While the committee’s suggestions are nonbinding, there is a stipulation requiring both the SEC and CFTC to publicly address any findings, indicating a push for increased transparency and cooperation between the two regulatory bodies. This initiative highlights the need to reduce regulatory overlap and assist innovation within the crypto landscape, as noted in a joint statement from SEC Chairman Paul S. Atkins and CFTC Acting Chair Caroline D. Pham.
One of the most significant changes proposed in the 2025 crypto bill is the introduction of protections for developers within the decentralized finance (DeFi) sector. The draft asserts that developers, validators, liquidity providers, and wallet builders would not automatically be subjected to traditional financial regulations provided their protocols are not centrally controlled. This provision aims to mitigate concerns that arose following legal actions against figures in the crypto space, such as the conviction of Tornado Cash co-founder Roman Storm, which raised questions about the intersection of software development and legal liability.
The bill further addresses commonplace crypto activities by exempting airdrops, staking rewards, and liquid-staking outputs from securities classifications. This clarification is designed to protect users from unintended legal implications of their engagements in these activities.
Notably, the bill includes provisions regarding Decentralized Physical Infrastructure Networks (DePINs), which would receive specific recognition under federal law for the first time. Tokens associated with DePINs would be exempt from the definition of securities as long as no single entity controls more than 20% of the supply. This safe harbor is intended to bolster decentralized efforts in areas such as telecommunications, storage, and sensor networks, which often rely on community involvement.
Additionally, the legislation touches upon tokenized real-world assets (RWAs), asserting that tokenization alone does not convert a non-security into a security. The bill directs regulators to examine standards surrounding verification, custody, audit, and enforcement concerning RWAs, particularly as financial institutions increasingly look to blockchain for asset issuance.
Senator Cynthia Lummis (R-WY), one of the key architects of this legislative effort, has expressed aims to finalize a reconciled version of the bill for President Trump’s signature before year-end. However, this Senate version will need to be harmonized with the Clarity Act, which received approval in the House in July.
This comprehensive approach to cryptocurrency regulation underscores the ongoing evolution of legal frameworks surrounding digital assets, signaling a potential new chapter in the relationship between innovation and regulation in the financial technology space.
