Pi Network - CLARITY Act Update!

[00:00:00]Hi, Dave Rosco here. It is Tuesday, July 21st, 2026, and I just wanted to give an update on the Clarity Act. Uh, it's been in the news a lot lately. Um, and a lot of people don't remember what it is. I did a a video on this a while back, but I figure it's time to dig into the into the details uh about what the Clarity Act is and what it means for crypto in general and the Pi network in particular. If you like what I do here, please give me the thumbs up and subscribe to my channel and turn on that bell uh notification so that you don't miss an update. Uh it really helps me get the message out and I appreciate it.

[00:00:45]Uh just an update on my anti-cammerbot.

[00:00:47]Um I have an unlock happening on August 2nd. Um but other than that, I don't have anything uh anything on my queue.

[00:00:57]So if you or somebody you know has a compromised wallet and stands to lose their unlocked Pi, reach out to me in the comments and let's see if I can help you. Let's take a look at the metrics.

[00:01:11]The circulating supply is 10.94 billion Pi and there have been no migrations since my last update. Um and and you're not reading that wrong. No updates. I mean um no migrations. Uh there is currently 17.44 million Pi in the Pi migration wallet and migrations are still not happening as of this moment.

[00:01:35]The total unlocked Pi is at 4.74 billion Pi with 12.8 million Pi unlocked since my last update and now free to be traded on the open markets.

[00:01:49]There's been a lot of talk recently about the Clarity Act. Um while it was uh passed initially in um 2025 by the House, uh it's still um working its way through through the Senate and uh it it faced a a quite a a hill to get uh adopted and as expected it went through several iterations before it finally um moved forward. And the big news of course is that uh very recently uh some of the major sticking points had been resolved and now they are expecting that the bill will move forward. Uh whether it will ultimately pass um remains to be seen. Um but it's very promising news. Uh so for those of you who don't know um the Clarity Act, also known as the digital asset market clarity act is uh an attempt by the United States to establish clear uh rules for the crypto market. Um the lack of of rules for how the crypto market is to work within the u the US financial system has always been and it's not just the US it's been for many countries has been the sticking point for widespread crypto adoption into financial systems and this is meant to address that. Um the US is trying to uh pave the way by introducing comprehensive legislation. Uh and it should um I think I think it behooves the US to be a leader in this space. Um but we'll see if the red tape gets in the way. Um because there's also movements by the UK, China, and Japan.

[00:03:33]Um so um they could beat us to it. Uh so the important thing about this legislation is that it sets the terms by which crypto is classified as a security or as a commodity. And that's very important because um a lot of the turmoil around crypto has come from the classification as crypto as a security which means that trading in crypto uh under the existing um guidelines is breaking the law and that is um part of the issue that had long plagued XRP. Um so this is hoping to uh resolve that issue and it splits up the regulatory responsibility between the SEC which would handle the securities aspect of this and the uh and the CFTC which would handle the commodity role for crypto. Um the as as I mentioned the House passed the um the bill initially HR 3633 on July 17, 2025.

[00:04:46]Um and the Senate Banking Committee approved a substantially amended version of that on May 14th, 2026 um by a vote of 15 to9. All 13 committee Republicans and two Democrats voted to advance it. Although the Democratic supporters did not agree that they would vote for the final bill, the amend the amended bill was placed on the Senate legislative calendar on June 1st, 2026.

[00:05:16]Um, and the latest reports are that the White House and Republican senators have reached an agreement uh concerning restrictions on crypto holdings or profits by senior government officials.

[00:05:27]And as we know, that's been a hot topic because um the the government has been accused of using insider trading to make big profits. And I'm talking, you know, double digit and higher profits on information that it has that no one else has. Um so they they suffer from having the same benefit by setting the rules by which crypto will will operate in our in our uh financial systems.

[00:05:58]Uh but this this agreement does remove uh one major political obstacle. Uh but the Democrats have reportedly not yet agreed to the final language uh with several remaining concerns uh in particular um government ethics, anti-moneyaundering rules, uh know your customer or KYC requirements and uh decentralized finance and stable coin rewards and interests. Now, this one, this last one has been a a big sticking point and uh Coinbase has been very vocal about this. Um, I personally am with the government on this one. I I don't have not heard a convincing argument to um convince me that stable coins should have uh yields and interest. Um, but then again, I'm not really a crypto guy, so I don't I don't claim to know all of the nuances. Uh but it's like saying the US dollar should provide rewards and interest. No, it's the products that you invest in with that money that provide rewards and interest, not the the the asset itself. But again, this is this could just be my naive showing through. Um this this bill still needs enough support to overcome the Senate's um 60 vote threshold. 60 vote threshold. After that, differences between the House and Senate versions would need to be resolved before the legislation could reach the president.

[00:07:27]Um, so what does the Clarity Act actually do? It divides the authority of cryptocurrencies between the SEC and the CFTC. The legislation would create a clearer division of responsibility relegating the um the SEC to to um regulating digital assets that qualify as securities and the CFTC would uh oversee spot trading in qualifying digital commodities. Uh crypto exchanges and brokers would have clearer registration paths so they'd be more willing and able to um to deal with cryptocurrencies on their exchanges. And it also opens up more possibilities for like uh ETFs um that are crypto-based being traded on the uh securities market. So this this this opens up a lot of possibilities which is why a lot of people in the crypto space are very excited about it. Uh a a token could potentially transition from a security um security related asset into a digital commodity as its underlying network matures. And that's the important part here. Just because you're classified as a commodity or a um a security does not mean that you'll always be that way or that any derivatives from your technology are automatically classified as a security or a commodity just because the base um asset is um allocated as such.

[00:08:57]Uh this is meant to replace uh the current system in which projects often do not know their legal classification until the SEC brings an enforcement action aka the whole XRP fiasco.

[00:09:11]Uh one of the most important concepts is that a token would not necessarily remain a security forever merely because it was originally distributed through an investment contract. And I think this is what I just said. Um, just because something's labeled one thing now doesn't mean it will stay that way.

[00:09:26]There are requirements that determine whether something is a security or a commodity. And as you as you satisfy or don't satisfy these requirements determines how you're ultimately classified. Um, to simplify this, a fundraising agreement might be a security. Um, and the reason for that is because fundraising usually involves some amount of promise of return. And that's where cryptos get get in a lot of trouble, right? Because the the idea that you're pumping your your token to raise raise revenue with the hopes that people who invest in you are going to make more money opens up that whole security risk because you're now speculating on price.

[00:10:15]Uh, and that's that's a big no no. Um, and this is why the Pi network has been so quiet about any speculation on price whatsoever. And they do not use um the Pi coin as a fundraising vehicle. Um, there's no ICOs or anything like that.

[00:10:31]So, they got that going for them. Uh, a token operating on a sufficiently mature blockchain might later be treated as a digital commodity. again that that based on whether or not it meets the certain criteria. Um and the project would still need to satisfy disclosure and compliance requirements which is all part of the checklist. Um this distinction could be especially important for networks that begin under centralized development but later become functional public blockchains. This is an interesting statement, right? because the Pi network is still largely centralized, but they do have a functional public blockchain. Um, now the nodes themselves are largely run by uh PI network controlled nodes. Uh, but that doesn't have to be the case and there's there's no real reason for it.

[00:11:23]Uh, and I suspect the days of the node being run by the the uh nodes controlled by the uh the Pyore team are numbered.

[00:11:32]Um I think the version 25, version 26, um road map is setting that line in the sand and the they want to be positioned for um favorable um treatment by the Clarity Act. So this the clock is ticking for the Pyore team.

[00:11:52]U now projects that seek favorable treatment like the Pi network would likely need to disclose information such as token supply and distribution which the Pi network has insider and foundation holdings. Uh now this is where a lot of people would disagree with me but I think the Pi network has been pretty transparent with their insider and foundation holdings. Um, you know, a lot of people don't know that the Pi uh network has parent companies and they do have uh investors. Um, but if you look, you'll find it. So, it shouldn't be a shock to a lot of people.

[00:12:29]Vesting and unlocked schedules. Um, that's a interesting one because it depends on how you talk about it. Um, for Pi network, you are bested the instant you are migrated and you get past your um your your twoe pending period. The unlocks are set by the user.

[00:12:49]So, it's clear what those unlocks are, but they're not on a published schedule, but I think that would still work. Uh, network governance, uh, that could be a problem. Pi network is u is still largely centralized with very little community governance. uh source code and technical operation. Uh the Pi network has uh relatively little publicly available uh source code uh related to their their blockchain, but you know, they've been promising that to change uh for quite a while now. Development team control that still falls under the source code and technical operations because the the work of the development team is still largely opaque.

[00:13:32]uh material risks and uh transaction history involving related parties. Um that I don't know really what that means because the history of the transactions is pretty um transparent being a blockchain project. Uh everything can be um can be seen openly and material risks I don't know where that would fall into because there's no investment involved.

[00:13:57]Um so the material risk is that you get nothing but you invested nothing. So, um, don't know what that would be. Um, the Senate version also includes restrictions preventing intermediaries from listing certain assets when the issuer fails to meet applicable requirements.

[00:14:15]So what that means is that if like the Pi network um would fail to meet the requirements for a particular classification then any intermediaries or you know anyone who wants to put products out based on it are restricted from doing so until that's resolved. Uh and that just makes sense right because you just don't want to build uncertainty upon uncertainty. It just it makes a lot of sense, but you know, you wouldn't think that this would have to be said, but when you're talking about law, things are very weird. Um, this bill would establish federal standards for companies that operate crypto exchanges, hold customer assets, execute trades, act as brokers or dealers, and facilitate digital commodity transactions. Um, potential customer protections include segregation of customer assets, custody standards, conflict of interest rules, market manipulation controls, bankruptcy protections, and disclosure requirements. Now, bankruptcy protections, um, that doesn't really apply to the Pi network, but it could apply to other cryptos. Um, market manipulation is a big one, right? Because right now the crypto markets are a wild wild west and market manipulation runs rampant. Now it runs rampant on the on the securities exchanges and commodities as well but just in a different way, right? Um and and and in a way that we've learned to accept and and work with. Uh crypto is a little bit different. uh you know, it's still very much a frontier um mentality and it's just rife for for fraud and for um for abuse and we need to get that under control if crypto is ever going to be accepted on the uh world financial markets. Uh the goal is to make uh regulated crypto platforms operate more like established financial markets while preserving self-custody and blockchain transactions. right? We don't we don't want to try to regulate crypto the same way we regulate banks.

[00:16:27]That would defeat the whole purpose. Um so you have to walk this fine line. Uh and it'll be interesting to see how this plays out. Um now what this means for crypto in generally um the likely winners uh would probably be established networks that can demonstrate a functioning blockchain, real transaction activity, independent validators, publicly available code, limited issuer control, transparent tokconomics, and meaningful non-investment utility. Now, the Pi network checks off a lot of these boxes. uh whether it's enough to satisfy regulators. Um that remains to be seen.

[00:17:10]Uh we have a functioning blockchain. We have real transaction activity. We have independent validators, but they're just not active. They're waiting to be activated. Um but um they do exist.

[00:17:26]Publicly available code depends. Pi network has released some code, just not all of it. uh limited issuer control. Um they do have that transparent tokconomics, they do have that as well.

[00:17:41]Um a lot of people disagree with that just because a lot of people don't read. Um but the tokconomics is out there. Now, no one's really holding them to the fire to see if they're following their tokconomics. Um, I've largely given up that goal and and just said, you know what, my guess is they are, and if they're not, someone else is going to figure it out because I just don't have the time or energy to do it. U, but uh with the with uh federal regulators involved, you can be sure that people who are smarter than me, whose whose only job this is, will be able to um vet that as part of this uh process. And then meaningful non-investment utility. Well, that's what Pi Network's about, right? Uh utility. There is no investment in Pi network. So, I think they're fine here.

[00:18:33]So, as far as this goes, um the Pi network looks pretty good with respect to um the Clarity Act. Um and like they show an example here of Bitcoin, uh would remain the easiest example of a digital commodity. And I don't think anybody would dispute that. Um, other mature networks could gain a more predictable route toward commodity treatment like the buy network. Um, this is also a good thing for exchanges because it may um allow them to list more assets. American exchanges are are limited um because they face the risk that the SEC could take anything that they list and later claim that it's an unregistered security which causes a lot of problems for the exchange and the people who've purchased and sold on their exchange. So, they've been hesitant to adopt it in the US. Um you'll find that the US crypto markets are far more restrictive than in other places. uh and and it's not even a um a countrywide thing, right? You can have stateto state have different requirements. So, this would help open things up and maybe homogenize u our stance with respect to exchanges and crypto. Um the clarity act would reduce all of this by providing a formal listing framework uh with defined compliance obligations and then greater security or certainty regarding SEC and CFTC jurisdiction because this would establish what's a security, what's a commodity and who regulates them. Um so uh and then it' be a procedure for terminating an assets classification which would be part of this whole process. So, this does not mean that every token would immediately receive a Coinbase Kraken or other US listing, but it does mean that exchanges would have a clear method for making the decision and then feeling more confident that they're not going to get burned by that decision later on. Um, now this does not come without costs. This and this is could could potentially hurt u smaller crypto projects um because this this adds a regulatory burden that and that doesn't come cheap. Um they could they could face substantial costs including legal analysis, financial disclosures, token distribution reporting requirements, code and governance documentation, ongoing compliance and anti-fraud controls. Now, I don't know if you know about a lot of other financial in institutes, but they have entire teams devoted to a lot of this stuff and that's expensive. Um, a lot of crypto projects are run by a fairly small team because they can be. Um, so you may see that even after the Clarity Act, um, there could still be a fringe of cryptocurrencies that are operating outside of any of these regulatory um, vehicles because they just can't afford afford it. Now, does that mean the death of these cryptos? Um, I don't know. It could very well be the death of them.

[00:21:39]Uh, only time will tell. Now, for the Pi network, um, there's an important limitation. The Clarity Network does not mention the Pi network specifically, nor should it. Um, and there's no guarantee that the Clarity Act would automatically declare Pi as a commodity, but there are factors that could help. Um, Pi network has an open network, which means they have a public blockchain. Um this matters because it can be discussed as an op uh as an asset operating on a functioning blockchain rather than merely as a future token promised by development team. Um that does not prove the argument that Pi should be treated as a digital commodity but it's one of the requirements as I mentioned earlier.

[00:22:26]Uh Pi emphasizes utility which I also mentioned earlier. um every you know public speaking event every update they talk about pi as a utility and the utility case for pi has been steadily growing even if it's not anywhere where people would be happy with u but you can't please everybody all we got to do is ple is please the US regulators and I think we're in pretty good shape there other evidence that could strengthen uh pi's position would include purchases of real goods and service which I think they could do that. Active Pi applications which we have developer activity which we have you can start seeing the strategic um posturing that PI has been making when you start looking at this list right technically they're checking off these boxes even if people aren't happy with it. I mean, PI, it's very clear to me that PI has been positioning itself for things like Micah ISO 20002 um and um and the Clarity Act compliance because they have to get through these near-term legislative hurdles in order to survive into the future. So, I mean, they have to and it's interesting to see how this is playing out. um persontoperson payments which we already have. Uh merchant adoption which we have some of um it's not as much as I would I would like but I don't know how much they're going to require. And then transation transactions unrelated to price speculation. Well that that falls under the persontoerson and merchant adoption right because those transactions are not price speculation.

[00:24:08]what's price speculation are the transactions that are happening um on the exchanges.

[00:24:16]So we so I think we can satisfy that requirement as well. Now Pi already has uh an an extensive KYC infrastructure which is a big part of uh this as well because identity verification is going to be at the the the core of all of this. Um, PI requires identity verification before mobile mind balances can be migrated and transferred to mainet. Um, that could make PI attractive to regulated businesses concerned about sanctions, fraud, bot accounts, money laundering, and of course, identity verification. Um, however, KYC alone does not determine whether PI is legally a security or commodity. It addresses a different regulatory issue, but it's still part of the checklist. you know, the more of the these things that the Pi network can check off, the better it's its case uh can that can be made as a commodity. Um, now PI states that nodes are intended to validate transactions using a system based on the stellar consensus protocol.

[00:25:18]It also presents publicly operated nodes as central to its decentraliz decentralization strategy. However, we're not yet running user nodes on the on the blockchain. So it's there but it's not there. Um so I have to have to work with that. Um so the regulators and exchanges would probably look beyond the number of installed nodes and more as more as um to whether or not these installed nodes are actually providing consensus on the blockchain. Um they could examine who selects the active validator set. Uh can or can ordinary operators independently join consensus?

[00:25:58]The answer is no. Uh who can who selects the active validator set? Well, the Pi knows because they're the only ones that are whitelisted. Uh who controls pro protocol upgrades? Pi network. Can the core team halt a reverse network activity? Um yeah, they can in a in a sense, but not entirely. Uh who controls quorum configuration again? Pi network.

[00:26:23]Does one organization retain privileged access? Well, I think the answer is clear based on everything we've already said. Pi network, they control the whitelisting which would open the doors for um for quorum and consensus on the blockchain. So yeah, they control it.

[00:26:42]And then how much governance power do independent participants actually possess? Well, right now virtually zero.

[00:26:49]So that would be a big hurdle for Pi network to overcome uh in order to be um considered a commodity on the Clarity Act. Now that doesn't mean that would re relegate them as a security. It just means that they may not be able to get classified at all until these things are resolved. The the the bottom line is that is the more that Pi's value and operation depend on the continuing managerial efforts of the Pyore team, the stronger the potential security arguments become. Uh and this is why the Pi network has been very careful about what they say publicly. Um potential areas of scrutiny uh involve control over mainet software, validator selection, ecosystem approvals, wallet infrastructure, KYC infrastructure, token migration, protocol upgrades, foundation or core team allocations. All of these things, every single item in this list is controlled by the Pyore team. So, you know, this they're not making a good argument right now. Um, so they would have to be um careful and they'd have to make a lot more progress by the time the Clarity Act comes around to avoid potential problems. And I think they're getting ready. A lot of these things will quickly become decentralized when they say they're ready. Um, I don't think there's anything fundamental. The biggest one I think would be the um the uh ecosystem approvals and KYC infrastructure. Those two things are the one thing that they have a strangle hold on right now. And I don't see how they're going to get rid of that anytime soon, but maybe making um strong headway on the other items is good enough. I don't know.

[00:28:34]Pi would benefit benefit from demonstrating that the blockchain can operate and develop independently of one central company or small group. Yes, it would, but we're just not there yet. Um and uh the token distribution will matter. Regulators would likely want detailed answers regarding maximum PI supply, circulating supply, unmigrated balances, locked balances, core team allocations, uh foundation or ecosystem reserves, mining rewards, referral rewards, future unlocks, and lost or forfeited balances. Now, almost all of this is readily available. Um, the one thing that's not is unmigrated balances because according to the Pi network, your Pi balance is not real until it's migrated. So, that would at best be an estimate, but maybe that's good enough.

[00:29:27]But, they certainly have all of the other information that's that I just listed here. So, that's that's going in their favor. Um, Pi's unusual mobile mining and migration system may require more explanation than a conventional token loss. And yeah, I think that may be true, at least initially. Once the regulars catch on to what it is they're doing, I think they'll get it. Uh, and and I think a lot of people agree that a conventional token launch is more fraught with peril than what the Pi network has done. And um so and then the other thing is is that even when a token qualifies as a commodity, they may they may independently examine how it was originally promoted or distributed. Um relevant questions could include was pi sold to raise development capital. Did users provide money or other valuable considerations?

[00:30:21]Were users encouraged to expect profits?

[00:30:24]Were advertisements and user data part of the economic exchange? Did the project make representations about future value? Were insiders or related entities compensated through token al allocations? Now, the answer to most of that is very much in favor of the pyore team because they did not sell pi to raise capital. They did not provide money or other consideration uh that can be considered valuable um to encourage a participation.

[00:30:55]Users were not encouraged to expect profits. That just happened. Uh in fact, they actually said that, you know, Pi is not a get-rich quick scheme. Many times um they did not advertise um well advertisements and user data were part of their economic exchange, but not with the users. they were part of the economic exchange for uh within their own um uh business operations. I don't know how that fits into things. Um but that's interesting because they certainly do have a boatload of our data um and what they're doing with it or how they're profiting from it could be a problem for them. Um so I guess the question is um you know could pi qualify as a commodity under the clarity act and the answer is yes but with a big excl uh exclamation point or or a big asterisk I should say. Um, PI would still need to satisfy each exchanges requirements regarding legal classification, network security, source code review, blockchain integration, liquidity, market manipulation, um, token concentration, insider holdings, custody support, regulatory disclosures, and geographic restrictions. The Clarity Act could remove one major obstacle, which is uncertainty over whether Pylisting would expose an exchange to an SEC enforcement action. But the Clarity Act also puts a lot of burden on the exchanges which the Pi network would have to satisfy at the individual exchange which I just listed. Um, best case scenario for Pi um would be that the Pi is recognized as a digital commodity operating on a mature blockchain.

[00:32:46]Pi uh submits its required legal disclosures. The network demonstrates meaningful decentralization. That's a big one. And the core team provides transparent tokconomics. Um US exchanges gain confidence that Pi can be legally listed. Uh which I think that will be easy. Um greater exchange access improves liquidity and price discovery.

[00:33:08]Um we know that. Um so this does open up Pi to to inclusion and more listings which improves these things. Um and then Pi applications and merchants gain easier access to regulated payment infrastructure.

[00:33:22]Um now a less favorable scenario would be that the Pi network remains too dependent on the core team and uh validator control is insufficiently decentralized. These are two big things that have to be addressed. Token supply information is inadequate which it's not. Uh and then Pi's value depends heavily on continuing managerial efforts. We know that to be true.

[00:33:47]Um, and then required disclosures have not been provided. In that situation, Pi might face delayed US listings, restricted trading, additional SEC registration requirements, and continued exclusion from some institutional platforms. Um, greater scrutiny of the core team token holdings and distributions. Um, now the most realistic conclusion is that the the Clarity Act would be mostly positive for the Pi network primarily because clear rules are better than indefinite regulatory uncertainty, but it's not a shortcut to approval. Um, the Pi network has, you know, some things to address.

[00:34:27]Uh, and it's not a slam dunk. So the clarity the clarity act could open the door for Pi network in the United States but PI still has to walk through all of the hurdles. Um the law may provide the regulatory pathway while piles by while Pi's decentralization transparency and actual utility will determine whether it qualifies.

[00:34:52]Well, that's all I've got for today.

[00:34:54]There there isn't much Pi network news out there right now, but the Clarity uh act has been in the news and I wanted to talk about it with respect to the Pi network uh and how their activity seems to be positioning them them to uh participate as a commodity within the Clarity Act framework. So, we'll have to keep an eye on that and see how it goes.

[00:35:19]But if anything breaks, I'll be sure to hop on here and let you know.

[00:35:25]But until then, don't panic.

[00:35:28]Stay the course. And remember, the success of the Pi network begins with you. Pi to the moon. Peace.