Toward bringing regulatory clarity to digital assets, U.S. Rep. Tom Emmer (R-MN) on March 26 proposed bipartisan legislation that would amend the securities laws to exclude investment contract assets from the definition of a security.
“Until we have a clear definition of what is a commodity and what is a security, American innovation will continue to suffer,” Rep. Emmer said. “Entrepreneurs need clarity to calculate risk accurately, create new investment opportunities and grow our economy. Our legislation will help provide these answers and allow American investors to fully participate in digital asset technology without sacrificing consumer protections.”
Currently, existing securities laws do not distinguish between an asset and the securities contract it may or may not be a part of, presenting regulatory challenges as many cryptocurrencies initially may be issued as part of a securities contract, but, once the project is fully developed and decentralized, the token could fall under a different classification, such as a commodity.
Without a distinction between the asset and the securities contract, projects that must raise capital to fund their development will not be able to move out of the securities framework once the project becomes decentralized, preventing these tokens from being used for their utility and harming American investors, according to a bill summary provided by Rep. Emmer’s staff.
The congressman sponsored the Securities Clarity Act of 2025, H.R. 2365, alongside lead original cosponsor U.S. Rep. Darren Soto (D-FL) to specify that any asset sold as the object of an investment contract, now defined as an “investment contract asset,” is distinct from the securities offering it was originally a part of.
This definition would be technology-neutral and would apply to all assets sold or offered that would only be considered a “security” because of their inclusion in an investment contract, states the summary.
“Blockchain technology helps boost our nation’s economy by allowing innovation to grow. With the Securities Clarity Act, Congress is working to protect those who invest in this technology,” said Rep. Soto. “This bill will add critical definition and jurisdiction to create certainty for a strong digital asset market in the United States — an important step in maximizing the potential of virtual currencies for the U.S. economy while protecting customers and the financial well-being of investors.”
H.R. 2365 has garnered support from the Coin Center, the Blockchain Association, the Chamber of Digital Commerce, and the Crypto Council for Innovation.