- The Digital Asset Market Clarity Act (H.R. 3633) would give the CFTC oversight of spot markets for "digital commodities" and leave the SEC in charge of tokens sold as investments.
- It passed the House 294–134 on July 17, 2025.
- The Senate's procedural vote failed 49–50 on September 15, 2026, short of the 60 votes needed. A motion to reconsider keeps it alive, but passage before 2027 is widely seen as unlikely.
- Nothing changes for your coins today. The SEC and CFTC are writing interim rules instead.
What Is the CLARITY Act?
For years, US regulators disagreed about whether a given token is a security (SEC rules) or a commodity (CFTC rules). The answer decides which rules an exchange must follow, what disclosures a project owes buyers, and who can bring enforcement cases. Most Bitcoin and Ether trading happens on spot markets, where no federal regulator has full supervisory authority.
The CLARITY Act is a market structure bill. It tries to settle those questions in law, so they aren't decided case by case in court. It's separate from the GENIUS Act, the stablecoin law signed on July 18, 2025.
What the CLARITY Act Would Do
- Split oversight. The CFTC would get exclusive jurisdiction over spot markets in "digital commodities," such as Bitcoin. The SEC would keep authority over tokens sold as investment contracts and over fundraising.
- Set a path out of securities law. It would add rules for when a token first sold as part of an investment contract stops being treated as a security, tied to how decentralized its blockchain has become.
- Register exchanges, brokers, and dealers that handle digital commodities with the CFTC.
- Protect customers. Registered platforms would have to keep customer assets separate from company funds and disclose risks, aimed at preventing another FTX-style collapse.
- Protect developers. Limited safe harbors would shield people who write or publish open-source DeFi code from liability for how others use it.
- Preempt some state rules for activity covered by the federal framework.
CLARITY Act Timeline
| Date | What happened |
|---|---|
| July 17, 2025 | House passes H.R. 3633, 294–134 |
| July 18, 2025 | GENIUS Act (stablecoins) signed into law |
| January 29, 2026 | Senate Agriculture Committee advances its market structure bill, 12–11 |
| May 14, 2026 | Senate Banking Committee advances its version, 15–9 |
| August 2026 | Senate floor vote delayed over ethics rules |
| September 15, 2026 | Cloture vote fails 49–50; Sen. Tillis enters a motion to reconsider |
Why the CLARITY Act Stalled
Two fights sank the September vote:
- Ethics. Senators split over provisions limiting the crypto holdings and business ties of senior federal officials, and couldn't agree on the language.
- Stablecoin yield. The GENIUS Act already bars stablecoin issuers from paying interest. Banks argued that exchanges paying "rewards" on stablecoin balances would pull deposits out of banks. The Senate Banking version tried a compromise: no interest or yield on idle stablecoin balances, but rewards tied to activity allowed. That didn't settle it.
What Happens Now
The bill isn't formally dead. Senator Thom Tillis voted no so he could file a motion to reconsider, which lets the Senate bring it back. With little floor time before the midterm elections, most observers don't expect passage in this Congress, which ends in January 2027.
Meanwhile, regulators are building rules under the powers they already have:
- SEC: proposed "Regulation Crypto Assets" in August 2026, with new registration exemptions and a safe harbor for when a token's investment contract ends. Comments are due October 20, 2026.
- CFTC: on October 5, 2026, it published an advance notice on rules for leveraged and margined retail crypto trading and a new category of registered crypto asset market.
Rules written by agencies can be changed by future agencies, which is why the industry still wants a law.
What It Means for You
- Your coins are unaffected. Owning, buying, and selling crypto stays legal. See is crypto legal in the USA?
- Exchange protections still vary. Without the law, there's no single federal rule requiring every exchange to segregate customer funds. Check how your platform holds assets, and consider self-custody for long-term savings.
- State rules still apply, including money transmitter licenses and New York's BitLicense.
- Taxes are a separate track. Crypto tax changes, such as applying the wash sale rule to crypto, are in a different bill.
- Watch for scams that use news about "new crypto laws" to push fake compliance fees or account "upgrades." See how to spot a Bitcoin scam.
CLARITY Act FAQ
What is the CLARITY Act in crypto?
The Digital Asset Market Clarity Act (H.R. 3633) is a bill that would divide crypto oversight between the SEC and CFTC, register crypto exchanges, and require them to protect customer assets. It passed the House in July 2025 but hasn't become law.
Did the CLARITY Act pass?
It passed the House 294–134 on July 17, 2025. In the Senate, a procedural vote failed 49–50 on September 15, 2026, short of the 60 votes needed. A motion to reconsider means it could come back.
Why did the CLARITY Act fail in the Senate?
Senators couldn't agree on ethics rules for federal officials' crypto holdings or on whether exchanges may pay rewards on stablecoin balances, which banks opposed.
What's the difference between the CLARITY Act and the GENIUS Act?
The GENIUS Act is a law, signed July 18, 2025, that regulates payment stablecoins. The CLARITY Act is a pending bill about the wider crypto market: which regulator oversees which tokens and how exchanges are registered.
Does the CLARITY Act affect my crypto taxes?
No. It deals with market regulation, not taxes. Crypto tax rules come from the IRS and separate tax bills, such as H.R. 10357, which would extend the wash sale rule to crypto.
Sources
Written by Asad Shaikh
Founder of StartCryptoNow. Nine years researching, trading, and teaching crypto; BSCS from Virtual University of Pakistan. Every tax figure is checked against IRS and state revenue publications. Our editorial policy.