Bipartisan State Attorneys General Urge Senate to Reject Clarity Act

The Digital Asset Market Clarity Act would create a federal market-structure regime for digital assets, defining when tokens are securities or commodities and splitting oversight between the Securities and Exchange Commission and Commodity Futures Trading Commission. The House passed H.R. 3633 by 294-134 on July 17, 2025, while the Senate Banking Committee advanced its version 15-9 on May 14, 2026. The bill matters because it could replace years of enforcement-led uncertainty with statutory rules for exchanges, issuers and decentralized-finance services.

The Senate is scheduled to vote at 2:15 p.m. on Sept. 15 on cloture for the motion to proceed, a test requiring 60 votes. Cynthia Lummis released revised text on Sept. 10 adding registration and Bank Secrecy Act requirements for non-decentralized DeFi protocols. Coinbase-backed Stand With Crypto said supporters contacted Congress nearly 50,000 times in August, while the industry has spent at least $190 million on the 2026 elections. The American Bankers Association, Independent Community Bankers of America and nearly 80 state groups are seeking a ban on stablecoin yield they say could drain deposits and curb local lending.

The Digital Asset Market Clarity Act (H.R. 3633) seeks to establish a federal framework for U.S. crypto markets. The National Sheriffs’ Association had opposed the legislation, warning that Section 604 could give crypto mixers, tumblers, decentralized-finance platforms and non-custodial software broad relief from anti-money-laundering obligations. The group argued those protections could make it harder to trace illicit transfers, prosecute financial crime and prevent sanctions evasion, making its resistance a significant obstacle for senators seeking law-enforcement support.

NSA President Sheriff Troy Wellman and Executive Director and CEO Justin Smith told Senate leaders John Thune and Chuck Schumer in a Sept. 3 letter that the association was moving from opposition to neutral, citing the bill’s complexity and unresolved details. The shift removes a prominent critic before a scheduled Sept. 15 procedural vote, which needs 60 votes to advance. It is not an endorsement: lawmakers still face disputes over Section 604 and an ethics provision sought by Democrats to curb presidential profits from digital assets, while the calendar leaves little time before November’s midterm elections.

U.S. crypto oversight has largely evolved through enforcement by the Securities and Exchange Commission and the Commodity Futures Trading Commission, leaving the industry seeking clearer statutory rules. Former New York Governor Andrew Cuomo said the CLARITY Act could provide a critical bridge between digital-asset markets and traditional finance, with implications for America’s ability to compete in financial innovation.

Cuomo warned that the United States is falling behind other markets in establishing crypto regulation and said the CLARITY Act “has to pass,” urging Congress to move quickly. The available report did not specify a vote date or any monetary figure. Attention now turns to whether the bill can secure sufficient congressional support and how its final language would divide regulatory authority over digital assets.

The Digital Asset Market Clarity Act is intended to establish a federal market structure for a US cryptocurrency industry valued at more than $2 trillion, bringing digital assets firmly within the regulated financial system. The bill remains stalled in the Senate, where lawmakers are divided over ethics restrictions on senior government officials’ crypto activity. Banks also oppose stablecoin rewards that resemble interest on deposits, warning they could pull money from the banking system.

CoinDesk reported on Aug. 4 that Crypto Watchdog, formed only weeks earlier, was saturating Washington television and social media with ads linking digital assets to terrorists, drug cartels and scams targeting seniors. Executive Director Chapin Fay declined to identify the group’s funders, despite portraying its mission as promoting transparency. A June survey of 1,000 voters commissioned by the group found 65% had a high level of distrust toward crypto. Senators face an Aug. 7 recess deadline and need at least 60 votes to advance the bill.

The Digital Asset Market Clarity Act, or CLARITY Act, is intended to replace the fragmented U.S. crypto rulebook with a federal market-structure regime. It would give the Commodity Futures Trading Commission a central role over digital commodities and trading intermediaries while defining the Securities and Exchange Commission’s authority. The House passed H.R. 3633 by 294-134 on July 17, 2025, and the Senate Banking Committee advanced it 15-9 on May 14, 2026, putting state-versus-federal enforcement at the center of the debate.

New York Attorney General Letitia James submitted written testimony on July 27, 2026, to the Senate Homeland Security and Governmental Affairs Committee’s Permanent Subcommittee on Investigations, warning that the measure would pre-empt state regulation and dilute local fraud enforcement. She said crypto-scam complaints to her office had tripled over three years and reported losses approached $500 million over five years. James urged Congress to preserve state money-transmission, commodities and securities laws and require platforms to meet anti-money-laundering, know-your-customer and cybersecurity standards, monitor suspicious activity and bear financial liability when safeguards fail.

The CLARITY Act aims to clarify how oversight of crypto assets is divided between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. The dispute centers on whether the Blockchain Regulatory Certainty Act, or BRCA, should exempt DeFi developers who do not control user assets, determining whether software developers must assume the responsibilities of financial intermediaries.

As of July 19, 2026, bipartisan Senate negotiations had broken down over an amendment providing a BRCA enforcement exemption, despite claims that lawmakers had reached 99% agreement. The legislative window is only about eight weeks. The White House will hold talks with law enforcement groups, but no compromise has emerged on the key provision. The bill could move to separate votes by the two parties, making it unlikely to clear the Senate threshold.

The CLARITY Act seeks to establish a US crypto-asset market structure framework and clarify the division of regulatory authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission. If the bill reaches the full Senate, it would typically need at least 60 votes to advance, making bipartisan cooperation critical to its prospects of becoming federal law. Current polling shows that most voters support clear cryptocurrency rules.

Coinbase Vice President of Policy Kara Calvert said at Consensus 2026 that the Senate Banking Committee could take up the bill as early as the following week. The committee subsequently scheduled a markup for May 14 and voted to advance the CLARITY Act. The bill must still clear a full Senate vote, while lawmakers' dispute over crypto-asset ethics rules for government officials could affect the final timetable and bipartisan support.

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.