US Treasury Secretary Bessent Urges Congress to Pass CLARITY Act, Define Crypto Oversight

The CLARITY Act is intended to establish a US market structure for digital assets and clarify how oversight is divided between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Its fate matters to token classification, trading-platform supervision and compliance obligations across the crypto industry. Supporters view legislation as a more durable way to end years of uncertainty over which agency governs different parts of the market.

With the bill’s prospects of passage fading, the SEC and CFTC are moving to develop crypto rules under their existing authorities. Industry experts caution that agency regulations would offer less lasting certainty than an act of Congress because a future administration or reconstituted commission could reverse them, while courts could also narrow or invalidate the measures. The emerging CLARITY-free approach may provide near-term guidance but leave companies exposed to another shift in US policy.

The CLARITY Act seeks to create the first comprehensive US market structure for digital assets, defining when tokens should be treated as securities or commodities and dividing oversight between the Securities and Exchange Commission and Commodity Futures Trading Commission. Its significance extends beyond jurisdictional lines: negotiations over stablecoins and decentralized finance could determine whether Congress can deliver durable rules for an industry still operating under fragmented enforcement and guidance.

The Senate majority leader has moved to initiate a procedural vote, positioning the bill for a possible full-chamber vote as early as mid-September. The White House has pledged to push CLARITY across the “finish line” in September, but resistance is mounting. Senator Ruben Gallego has urged colleagues not to rush the measure, Galaxy cut its estimated odds of passage to 10%, and the CFTC and SEC are exploring joint regulatory steps should Congress fail to act.

The Digital Asset Market Clarity Act would divide oversight of digital assets between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, while establishing federal rules for token issuers and trading venues. The House passed the measure 294-134 on July 17, 2025. Its fate matters because legislation would provide a more durable framework for the industry than agency interpretations that can shift between administrations.

Bernstein warned on Aug. 3, 2026, that failure to enact the Clarity Act this year could trigger another leg lower in crypto valuations as the market loses a key policy catalyst. Prediction-market odds had fallen to 31%, with the Senate approaching its recess around Aug. 7. The broker said a legislative defeat would nevertheless push the SEC and CFTC to accelerate rulemaking under Project Crypto, leaving regulators, rather than Congress, to drive the next phase of U.S. crypto oversight.

The CLARITY Act would establish a federal market structure for digital assets, delineating oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission while strengthening consumer protections and anti-money-laundering safeguards. Supporters say regulatory certainty is critical to keeping crypto investment, jobs and innovation in the United States as jurisdictions worldwide compete to shape the industry’s rules.

Treasury Secretary Scott Bessent urged the Senate to vote on the legislation before its recess, warning that further delay could cost the US its leadership in digital assets. The House passed the measure on July 17, 2025, by 294 votes to 134. Bessent sharpened his appeal by invoking Bitcoin creator Satoshi Nakamoto, using the pseudonymous developer’s words to press Democratic senators to move quickly.

FTX’s Nov. 11, 2022 bankruptcy exposed gaps in U.S. oversight of digital assets, leaving customers uncertain about custody, asset segregation and their treatment in insolvency. The Digital Asset Market Clarity Act, or H.R. 3633, seeks to close those gaps by placing exchanges, brokers, dealers and custodians under clear federal rules covering registration, capital, disclosures, conflicts of interest, fraud prevention and customer-property protections, while defining the respective roles of the SEC and CFTC.

The House passed the bill 294-134 on July 17, 2025, and the Senate Banking Committee advanced its version 15-9 on May 14, 2026, with support from two Democrats. Coinbase Vice Chair Ryan VanGrack said on July 20 that Democratic negotiators had added stronger customer safeguards to give the legislation “more teeth.” As of that date, senators had neither released the final text nor scheduled a floor vote, while ethics limits involving government officials’ crypto interests remained unresolved after President Donald Trump disclosed $1.4 billion in related earnings in June.

U.S. cryptocurrency oversight has long remained murky, with the Commodity Futures Trading Commission and Securities and Exchange Commission vying for the lead role. The CLARITY Act before Congress seeks to establish clear market-structure rules and resolve enforcement disputes once and for all. Its passage will directly affect whether the United States retains influence over the global digital-asset financial system and prevents domestic companies from moving abroad because of regulatory uncertainty.

CFTC Acting Chairman Selig recently warned that regulators would write their own rules to fill the legal void if Congress fails to pass the CLARITY Act before its August recess this year. He said such an outcome would cost the United States its authority to set cryptocurrency rules and force U.S. companies to operate under overseas frameworks such as the European Union’s Markets in Crypto-Assets Regulation, or MiCA.

The CLARITY Act aims to create the first federal market regulatory framework for U.S. digital assets, chiefly by defining the respective jurisdictions of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). If enacted, the bill would affect token classification, trading-platform compliance and investor protection. It is also a key part of the Trump administration’s effort to institutionalize cryptocurrency policy.

White House crypto adviser Patrick Witt said officials were pushing to complete the legislation by July 4, 2026. The Senate Banking Committee is expected to hold a markup in May before sending the bill to the Senate floor in June. However, four disputed issues — including stablecoin yield mechanisms and ethics provisions for public officials — still require a bipartisan compromise. The estimated chance of passage has fallen below 50%, while one reporter said the legislative process could make meeting the deadline difficult.

The US Congress is considering the CLARITY Act, which seeks to clarify regulatory responsibilities for digital assets and trading platforms and reduce legal uncertainty for crypto companies. Senator Cynthia Lummis says clear rules are critical to bringing businesses back to the United States and preserving the country’s leadership in financial technology.

Lummis warned that this week could be the United States’ last critical opportunity to advance the CLARITY Act before 2030. She said China could otherwise write the rules for a new financial era. Negotiations have continued since the Senate returned, but Democrats and Republicans remain divided over provisions covering lawmakers’ ethics and safeguards against bad actors. A vote on crypto market structure could take place as early as August.

The U.S. Congress is considering the Clarity Act, which would expand the Commodity Futures Trading Commission’s authority over digital asset markets. Brookings Institution fellow Aaron Klein said shifting responsibilities without a corresponding increase in enforcement resources would undermine investor protection and market order.

Klein warned that regulation could become little more than a formality if Congress grants the CFTC new powers without providing adequate funding and staff with digital asset expertise. Reports did not specify the additional budget, staffing levels or a firm timetable for deliberations, making the bill’s eventual resource allocation critical to its effectiveness.

The Digital Asset Market CLARITY Act seeks to divide regulatory jurisdiction between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), while establishing registration and trading rules for cryptocurrencies, tokenized assets and decentralized exchanges. The legislation will determine whether firms can operate under a consistent U.S. compliance framework and could influence whether financial innovation moves offshore.

The U.S. House of Representatives passed H.R. 3633 on July 17, 2025, by a vote of 294–134, but Senate consideration has been delayed by disputes over rules governing stablecoin interest and rewards. Treasury Secretary Scott Bessent again urged Congress on April 10, 2026, to complete the legislation swiftly, noting that the global crypto market is worth $3 trillion and that nearly one in six Americans owns digital assets.