Democrats Add Consumer Safeguards to U.S. Crypto CLARITY Bill
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.
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The history behind this eventCLARITY Act Would Codify Crypto AML Rules, Ease Bank Risk
U.S. banks have struggled to assess crypto counterparties because digital-asset firms operate under a fragmented regulatory regime. The Digital Asset Market Clarity Act would divide oversight between the Securities and Exchange Commission and Commodity Futures Trading Commission while treating digital commodity exchanges, brokers and dealers as financial institutions under the Bank Secrecy Act. Supporters say codified anti-money-laundering duties would narrow the compliance gap between crypto companies and traditional finance.
The House passed H.R. 3633 on July 17, 2025. The Senate Banking Committee advanced an amended version by a 15-9 vote on May 14, 2026, and the measure was placed on the Senate calendar on June 1. If enacted, the legislation would give banks a statutory basis for evaluating digital-asset clients and counterparties, potentially reducing reliance on institution-by-institution risk judgments and lowering uncertainty over whether crypto firms meet federal AML requirements.
US Treasury Secretary Bessent Urges Congress to Pass CLARITY Act, Define Crypto Oversight
US crypto assets have long been overseen separately by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), with no clear line determining whether a token is a security or a commodity. The Digital Asset Market Clarity Act aims to delineate the agencies’ responsibilities, reduce regulatory uncertainty for the industry and cement US leadership in setting global rules for crypto finance.
US Treasury Secretary Scott Bessent recently urged Congress in an opinion piece to pass the bill this summer. The House approved it by a 294–134 vote on July 17, 2025, but it still awaits Senate action. The White House had pushed to complete the legislation by July 4, while prediction markets currently put its chance of passage this year at about 70%. Bessent also said the Strategic Bitcoin Reserve is moving forward cautiously.
US CLARITY Act Should Extend Protections to Self-Custody Wallets
The US Digital Asset Market Clarity Act (H.R. 3633) seeks to divide regulatory authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Users of self-custody wallets control their own private keys. Treating software providers that do not control assets as financial intermediaries could restrict innovation in blockchain payments and leave less room for integration with compliance systems.
The House passed the bill on July 17, 2025. The Senate Banking Committee then voted 15–9 on May 14, 2026, to advance it to the full Senate. WalletConnect CEO Jess Houlgrave argued on June 4 that the bill should also establish a safe harbor for self-custody infrastructure and that regulation should target intermediaries that actually hold or control assets.
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